Government Shutdown and Market Impact - The Senate voted 60-40 to advance a bill aimed at ending the government shutdown, with a final vote yet to be scheduled [1][8] - The reopening of the government is expected to provide clarity on economic data necessary for Federal Reserve interest rate decisions, contributing to a positive market sentiment [2][12] - US stock futures are showing strength, particularly in the NASDAQ, which is projected to gain about 1.5% at the open [6][18] Earnings Reports and Company Performance - Disney is anticipated to report its first quarterly adjusted earnings drop in over two years, with earnings expected at $1.14 per share, down from $1.14 a year ago, and revenue projected to rise by only 1% to $22.8 billion [22][23] - Coreweave is expected to report strong results following deals with OpenAI and Meta, despite facing a 22% stock decline last week amid an AI-driven sell-off [3][18] - Pfizer has won a bidding war for obesity startup Metsa, agreeing to pay up to $10 billion, while Monday.com has narrowed its revenue forecast, causing its shares to plunge [30][31][32] Market Sentiment and Future Projections - UBS forecasts the S&P 500 could reach 7500 by the end of 2026, driven by an AI tech rally and corporate earnings growth [19][20] - Morgan Stanley also predicts that corporate earnings will fuel the US stock rally, with the S&P 500 expected to post a nearly 15% jump in third-quarter profits [20][21] - Analysts are cautious about the sustainability of current market momentum, with concerns about potential deceleration in growth rates and the impact of a bubble in AI-related stocks [39][42]

Core Insights - The Optimist Fund achieved a return of +9.1% in Q3 2025, significantly outperforming its benchmark [5] - The fund's year-to-date return stands at 44.5%, compared to the benchmark's 11.1% [5] - The fund anticipates continued growth opportunities over the next three and a half years, similar to recent performance [4] Fund Performance - The fund's performance over various periods shows significant volatility, with a notable recovery from a -51.4% return in 2022 to 82.9% in 2023 [5] - Compound returns as of September 30, 2025, indicate strong performance across 1-year (61.2%), 2-year (65.6%), and 3-year (61.9%) periods [5] Top Contributors - **Wayfair**: Revenue increased by approximately 5% year-over-year to $3.27 billion, marking its fastest growth since Q1 2021. Adjusted EBITDA reached $205 million, indicating a margin above 6% for the first time since Q2 2021 [7][8][9] - **ThredUp**: Revenue rose 16% year-over-year to $77.7 million, with adjusted EBITDA increasing by around 100%. Active buyers grew by 17% to 1.47 million [10][11][12] - **Carvana**: Retail units sold increased by 41% year-over-year to 143,280 vehicles, with total revenue rising 42% to $4.84 billion. Adjusted EBITDA reached $601 million, reflecting a 12.4% margin [13][14][15] Top Detractors - **Monday.com**: Despite a 27% increase in revenue, the company reduced its second-half 2025 revenue guidance due to weaker performance marketing trends, causing investor concerns [20][21][22] - **Fiverr**: Results were below expectations, leading to a reduction in position size despite maintaining an attractive risk/reward profile [25][26] Portfolio Composition - The top 10 holdings comprise approximately 85% of the portfolio, including ThredUp, Monday.com, Carvana, Uber, Wayfair, DoorDash, First Advantage, Fiverr, Latham Group, and Medpace [27] Notable Changes - The fund exited positions in HelloFresh and Revolve due to management changes and reduced confidence in growth prospects, reallocating capital to more promising opportunities [29][30] Company Insights - **Medpace**: A leading contract research organization (CRO) focused on small and mid-sized biotech companies, showing strong revenue growth of 14.2% year-over-year to $603.3 million [31][18][35] - The company has a disciplined capital allocation strategy, with a history of share repurchases during market downturns, enhancing long-term growth potential [34][35]

Market Overview - SMID cap growth equities saw significant gains in Q3 2025, with the Russell 2500 Growth Index increasing by 10.7% [2] - The supportive policy backdrop included a Federal Reserve rate cut, a reconciliation/tax bill, and trade deals that reduced tariffs compared to April levels [2] - The performance of SMID growth equities was comparable to large cap peers, with the Russell 1000 Growth Index rising by 10.5% and the Russell 2000 Growth Index returning 12.2% [2] Policy Environment - The policy environment became more predictable and supportive for consumers and businesses, leading to renewed confidence in capital allocation and investment decisions [3] - This shift positively impacted sectors like industrials and health care, where balance sheet strength and visible growth pipelines are key differentiators [3] Investment Landscape - Despite an improved environment, investors remained selective, particularly in consumer-sensitive industries and those facing AI disintermediation risks [4] - Many small- and mid-cap growth companies are still navigating a bottoming process, with uneven demand trends and cost pressures acting as headwinds [4] Portfolio Performance - The ClearBridge SMID Cap Growth Strategy underperformed its benchmark in Q3, with strong contributions from health care and select industrials offset by weakness in information technology and consumer discretionary sectors [5] - Notable performers included Medpace, Insmed, and Doximity in health care, while Chewy and Wingstop faced challenges in consumer discretionary [7] Portfolio Positioning - The strategy focused on adding innovative growth companies with large addressable markets, initiating positions in Avidity Biosciences and Kratos Defense [9][10] - Exited positions included Globant due to geopolitical concerns and volatility from AI adoption risks [11] Outlook - SMID cap growth stocks face near-term headwinds from consumer spending and technological advances favoring mega-cap AI beneficiaries [12] - However, Fed easing and greater policy clarity create a more constructive environment for growth execution [12] - The potential for re-acceleration in depressed subsegments of the SMID growth market is anticipated, with a focus on innovative businesses with strong balance sheets [13] Portfolio Highlights - The ClearBridge SMID Cap Growth Strategy had positive contributions from seven of the ten sectors invested, with industrials and health care being the largest contributors [14] - Stock selection in IT, consumer discretionary, and materials sectors detracted from performance, while consumer staples and health care sectors provided benefits [15] Individual Stock Performance - Key contributors to relative returns included Bloom Energy, Medpace, Comfort Systems, and Insmed, while detractors included Wingstop and Monday.com [16] New Positions - New positions initiated included CG Oncology in health care, Karman and Rocket Lab in industrials, and Credo Technology in IT [17]

Core Insights - The initial optimism surrounding AI as a multiplier for SaaS has shifted to concerns about AI replacing traditional SaaS roles, leading to a decline in the subscription-based revenue model that has supported the industry [1][2][3] Group 1: Transition from Human-Centric to AI-Centric - The SaaS industry's growth has relied heavily on the "seat-based" pricing model, where companies pay based on the number of users [2] - AI is disrupting this model by taking over tasks previously performed by humans, leading to a reduction in the number of required seats [3] - Companies are increasingly integrating AI to automate processes, resulting in significant reductions in the number of paid seats needed [3][4] Group 2: Pricing and Revenue Model Challenges - The traditional subscription model is under threat as companies shift from paying for "AI features" to paying for "AI-generated results" [5][6] - A significant percentage of companies (63%) are expected to demand payment based on actual AI usage or value generated by 2025 [6] - This shift poses a dilemma for SaaS companies: they must either accept revenue declines or demonstrate that AI adds enough value to offset the loss of seats [6][7] Group 3: Cost Implications and Market Dynamics - The costs associated with providing AI functionalities are rising, leading to a new pricing model where AI features are charged based on usage rather than being included in seat subscriptions [7][8] - Companies face customer complaints regarding increased costs despite improved efficiencies from AI, highlighting a paradox where efficiency gains may lead to higher expenses [7][8] - The transition to an AI-driven model requires SaaS companies to rethink their sales strategies, product designs, and organizational structures [8][9] Group 4: Industry Evolution and Future Opportunities - The current disruption is seen as a painful but necessary restructuring of the SaaS industry, moving from a focus on user tools to intelligent process support [9][10] - Companies that can effectively integrate AI into their core offerings and adapt their pricing models are likely to find new growth opportunities in the evolving landscape [9][10]

All right, let's get to a mad dash as we get ready to begin trading uh about seven minutes from now. Monday. com was a big loser yesterday.Jim, you're coming back to it this morning, >> right. Well, I have here in my hand Josh Bear, not that familiar with this work, who upgrades Morgan Stanley upgrades uh Monday after a brutal look at that. That's actually a decline.Now, why was Monday down. Monday is a company does work processes. He's not unlike it's a junior service.Now if you want to well it happened to ...

Market Overview - The Customer Relationship Management (CRM) market was valued at USD 80.01 billion in 2023 and is projected to reach USD 248.48 billion by 2032, growing at a CAGR of 13.45% from 2024 to 2032 [1][3]. Key Growth Drivers - Growth in the CRM market is driven by compliance needs and privacy laws shaping data protection and operational efficiency [3]. - Increasing demand for customized customer experiences, enhanced business efficiency, and higher customer involvement are key factors [4]. - Next-generation technologies such as AI, ML, and big data analytics are facilitating predictive analytics and targeted marketing, leading to further CRM penetration [4]. Market Segmentation By Component - Software holds a commanding 74.8% share of the CRM market in 2023, integral to modern customer management [5]. - The service segment is expected to experience the fastest growth due to increasing demand for implementation, customization, and consulting services [6]. By Deployment - Cloud-based CRM solutions captured 58.7% of the market share in 2023, favored for their flexibility, scalability, and cost-efficiency [7][8]. - On-premise CRM is projected to grow rapidly from 2024 to 2032, driven by businesses seeking greater control over their data [9]. By Solution - Customer service accounted for 24.2% of the CRM market share in 2023, critical for enhancing customer satisfaction and loyalty [10]. - CRM analytics is forecasted to grow at the fastest rate from 2024 to 2032, driven by the increasing importance of data-driven decision-making [11]. By End Use - The retail sector dominated the CRM market with a 24.7% share in 2023, focusing on boosting customer engagement and improving sales processes [12]. - The IT & Telecom sector is expected to experience the fastest CAGR from 2024 to 2032, fueled by increasing demand for automation and customer management solutions [13]. Regional Analysis - North America led the CRM market in 2023 with a 44.7% share, attributed to high adoption of advanced technologies and early embrace of cloud solutions [17]. - Asia Pacific is projected to grow at the fastest rate from 2024 to 2032, driven by rapid digitalization and increasing CRM investments [18].

Group 1: Meta Platforms - Meta Platforms has experienced a revenue growth of 22% in 2024, driven by advertisers targeting over 3.3 billion daily users [3] - The company is investing between $60 billion and $65 billion in capital expenditures for AI and other business needs this year [4] - Analysts project an annualized earnings growth rate of 18%, with the stock trading at a forward price-to-earnings ratio of 26, indicating potential for the share price to double in five years [7] Group 2: Monday.com - Monday.com shares have increased by 126% since 2022, capitalizing on the demand for automated work management solutions [8] - The company has seen a 22% annualized growth in customer count over the last five years, with revenue up 33% in 2024 [8] - The stock is trading between 9 and 18 times sales, and if it maintains a valuation around 10 times sales while growing revenue over 20% per year, shares could double by 2030 [11]