Core Insights - The article discusses the positive outlook for international stocks in 2026, highlighting robust earnings, economic growth, and attractive valuations compared to the S&P 500 [2] - It emphasizes the potential for diversification away from the tech-heavy S&P 500, suggesting that international stocks are an appealing alternative for investors [2] Economic Context - Several international economies are expected to implement significant fiscal stimulus, which is anticipated to enhance stock market performance [3] - Germany's fiscal spending is projected to increase, with a focus on a €500 billion infrastructure fund and raising defense spending to 3.5% of GDP by 2029 [3] - Japan has announced its largest stimulus package since the pandemic, totaling ¥21.3 trillion (approximately $136 billion), aimed at inflation relief for key industries such as AI, semiconductors, and shipbuilding [4] Investment Methodology - The list of the 10 Best Non-US Stocks to Buy According to Hedge Funds was curated using the Finviz stock screener, WSJ, and Insider Monkey's Q3 2025 database [6] - Stocks were ranked based on the number of hedge fund holders, with market capitalization data sourced from the Wall Street Journal [6] Stock Highlights - **Shell plc (NYSE:SHEL)**: - Market Capitalization: $204.91 billion - Number of Hedge Fund Holders: 48 - Announced a final investment decision on its waterflood project at Kaikias field, expected to increase recoverable resource volumes by approximately 60 million metric barrels of oil equivalent [8][10] - Wall Street maintains a bullish outlook, with a Buy rating and a price target of £2,686.5 from Goldman Sachs and Barclays [12] - **Novo Nordisk A/S (NYSE:NVO)**: - Market Capitalization: $224.04 billion - Number of Hedge Fund Holders: 50 - Received a positive opinion from the European Medicines Agency for a higher dosage of Wegovy, showing improved weight loss results of around 20.7% at 72 weeks [14][15] - The stock has a cautious outlook from Wall Street, with a Hold rating and a price target increase from $47 to $54 by HSBC [17]

Group 1: Core Insights - Artificial intelligence is projected to remain central to investment strategies, with expectations of continued economic expansion and gains in the S&P 500 index [1][2] - Global GDP growth is estimated to be between 2.4% and 3.3%, indicating resilience in the global economy [2] Group 2: Stock Forecasts - Various brokerages have provided forecasts for the S&P 500 index in 2026, with targets ranging from 7,100 to 8,100 [3] - Notable targets include Citigroup at 7,700, Deutsche Bank at 8,000, and Oppenheimer Asset Management at 8,100 [3] Group 3: Real GDP Growth Estimates - Real GDP growth forecasts for the U.S. and other regions vary among brokerages, with Citigroup predicting 1.9% for the U.S. and Goldman Sachs at 2.3% [4] - Morgan Stanley projects a 3.2% growth rate globally, with 1.8% for the U.S. [4]

Core Viewpoint - Mastercard Incorporated (NYSE:MA) is recognized as one of the 14 most promising fintech stocks to invest in, with an upgraded rating from HSBC from Hold to Buy and an increased price target from $598 to $633, indicating a favorable investment opportunity due to the stock's recent weak performance [1][2] Financial Performance and Growth Outlook - HSBC analysts project low double-digit revenue growth and mid-teen earnings per share growth for Mastercard, supported by strong financial results and attractive stock valuation, despite challenges from Capital One's debit migration [2] - The company is experiencing strong demand for its services and faster growth in markets outside of the US, contributing to its optimistic growth outlook [2] New Product Launch - Mastercard and L'Oreal are launching a joint business card, the L'Oréal Mastercard BusinessCard, aimed at beauty salon operators in Latin America and the Caribbean, with an initial launch in Mexico through corporate card provider Clara [3][4] - There are plans to expand this card to other markets in Latin America and the Caribbean with additional financial partners [4]

Core Viewpoint - Micron Technology, Inc. is recognized as a leading player in the AI sector, with HSBC initiating coverage and setting a price target of $330, citing strong AI-related memory demand as a key driver [1]. Group 1: Stock Performance and Market Sentiment - Micron's share price has increased by 172% year-to-date, significantly outperforming the NASDAQ's 22% rise, although recent concerns about financial risks from neo-cloud service providers have led to a subdued stock price [2]. - HSBC analyst Ricky Seo suggests that the current market conditions present a favorable opportunity to accumulate Micron shares, despite the recent price fluctuations [2]. Group 2: Market Cycle and Growth Projections - Seo predicts that Micron will experience a 4-to-5-year upcycle, driven by increased AI spending from neo-cloud service providers and the Stargate Project, contrasting with the historical 2-3 year cycle [3]. - The limited capacity in the market is expected to restrict output growth, which could further benefit Micron as demand increases [3]. Group 3: Market Growth Estimates - The DRAM and NAND markets are projected to grow by 69% and 62% year-over-year, respectively, by 2026, positioning Micron as a key beneficiary of this growth [4].

Market Overview - Markets celebrated the Federal Reserve's latest quarter-point cut, lowering rates to a range of 3.5% to 3.75% [2] - The central bank announced it would purchase short-term bonds, driving down short-term yields, and removed language indicating the labor market "remained low," suggesting a potential focus on supporting the jobs market over inflation [3] Oracle - Oracle reported revenue of $16.06 billion, missing analysts' expectations of $16.21 billion [4] - Software revenue was $5.88 billion, below the estimated $6.06 billion [4] Micron - UBS reiterated a buy rating on Micron with a price target of $295 ahead of earnings, increasing from a previous target of $275 [7] - HSBC initiated coverage of Micron with a buy rating and a price target of $330, citing a potential benefit from a "historic upcycle" aided by artificial intelligence [7] Netflix - Analysts at Needham maintain a buy rating on Netflix, suggesting that the company does not need to acquire Warner Bros. Discovery [8] - The firm believes that without WBD, Netflix is more global, nimble, tech-first, and has greater flexibility with Hollywood unions [8]

Core Insights - AbbVie Inc. (NYSE:ABBV) is recognized as one of the 15 Best Stocks to Buy for the Long Term [1] - HSBC upgraded AbbVie to Buy and raised its price target from $225 to $265, while Piper Sandler reiterated a Buy rating with a price target of $289, indicating a 29.6% upside potential [2] Financial Performance - AbbVie has reported significant sales growth in its top-selling drugs: Skyrizi achieved $4.7 billion in sales with a 46.8% increase, Rinvoq generated $2.18 billion with a 35.3% year-over-year growth, and Humira reached $993 million, reflecting a 55.4% growth from the previous year [3] - The management anticipates further growth, projecting Rinvoq to generate $11 billion in revenues by 2027 and Skyrizi to reach $20 billion, supported by a strong drug portfolio and pipeline expansion through acquisitions [4] Dividend Information - AbbVie raised its quarterly dividend by 5.5% to $1.73 per share, marking the 53rd consecutive year of dividend growth, resulting in an annual payout of $6.92 per share [5]

Core Viewpoint - The acquisition of Warner Bros. Discovery (WBD) by Netflix for $72 billion, along with assuming $10.7 billion in debt, marks a significant shift in Netflix's strategy, driven by growth anxiety and changes in management style [5][10][13]. Acquisition Details - The assets being acquired include WBD's streaming services like HBO, WBO Studios, and iconic IPs such as "Harry Potter," "DC Universe," and "Game of Thrones," while excluding sports content [7][8]. - The total acquisition cost amounts to $82.7 billion, with Netflix paying $27.75 per share, 84% in cash and 16% in stock [8][9]. - The merger is expected to occur after WBD's restructuring, likely post-Q3 2026, pending regulatory approval due to antitrust concerns [9][10]. Market Context - The valuation of the acquisition is approximately 22x EV/Adj. EBITDA, which is higher than Netflix's current valuation of around 30x [9]. - Netflix's cash reserves are limited, necessitating a $59 billion bridge loan from banks to finance the cash portion of the deal [9][10]. Regulatory Concerns - The primary risk associated with the acquisition is regulatory scrutiny, particularly regarding antitrust issues, as the combined user base in the U.S. could exceed 30% of the market [10][11]. - Netflix may attempt to redefine the streaming market to mitigate regulatory risks by including platforms like YouTube in market share calculations [11][13]. Strategic Shift - Netflix's shift from a "build rather than buy" strategy is attributed to increasing costs of creating new IP and the need for more diverse content to sustain growth [14][15]. - The imposition of a 100% tariff on foreign-produced content by the Trump administration could hinder Netflix's international strategy, further motivating the acquisition [15][16]. Management Changes - The change in Netflix's management style from idealism to a more pragmatic approach is evident, especially following the departure of founder Reed Hastings [17][19]. - Hastings' recent stock sales suggest a divergence from the company's current strategic direction, indicating a shift towards a more realistic outlook under new leadership [19][20]. Financial Implications - The acquisition is expected to save Netflix $2-3 billion annually in content costs, but the financial burden of the bridge loan could exceed these savings, leading to increased interest expenses [21][22]. - The deal may create short-term cash flow pressures and uncertainty for investors, potentially leading to a transition period as the market adjusts to the new strategy [22].

Supply Chain Realignment - The share of U.S. supplier volume from China, Hong Kong, and Korea has decreased from 90% to 50% over the past decade, with this shift accelerating since the first wave of tariffs in 2018 [1] - Vietnam, Indonesia, Thailand, and India have emerged as significant beneficiaries, managing a growing share of U.S.-bound production, with supplier diversification now evenly split between North Asia and South Asia [2] Trade Dynamics - U.S. imports from China have declined by 26% year-over-year, while trade between China and Indonesia has increased by 29.2%, Vietnam by 23%, and India by 19.4% [3] - U.S. imports from Vietnam have also grown, increasing by 23% this year [3] Tariff Impact on U.S. Companies - U.S. companies are facing significant pressure from tariffs, with many firms that frontloaded inventory in early 2025 now running low, leading to rising costs and tighter cash flow [4] - The average tariff has risen from 1.5% to double digits, particularly affecting sectors like retail and generic pharmaceuticals due to their thin margins [5] Financing Needs and Trends - Over 70% of U.S. businesses surveyed reported increased cash needs compared to last year, with financing tools like HSBC's Trade Pay platform seeing a 20% increase in activity since the new tariffs were implemented in April [6] - As inventory buffers deplete, the demand for working capital is expected to continue growing [6]

Core Insights - Cloudflare experienced a network outage due to a change in its Web Application Firewall, which caused service disruptions for several minutes on December 5 [3][2] - The incident was not a result of a cyber attack but was related to a fix for a recently disclosed vulnerability in React Server Components [3] - The outage affected numerous high-profile websites, including those of banks, Shopify, Zoom, and government entities in Norway and Sweden [4][5] Incident Details - Cloudflare first reported service issues at 08:56 UTC, indicating problems with the Cloudflare Dashboard and related APIs [2] - A fix was implemented by 09:12 UTC, and the incident was declared resolved by 09:20 UTC [2] - During the outage, reports of issues peaked at approximately 2,000 according to Downdetector [5] Impact on Clients - The outage impacted major clients such as Coinbase, Substack, HSBC, and Deliveroo, highlighting Cloudflare's significant role in managing and securing web traffic for 20% of the internet [5] - Previous outages, including one on November 18, had also affected high-profile services like ChatGPT and social platform X, raising concerns about reliability [6]

Company Focus - Hangzhou Wahaha Group's heiress is seeking court approval for further appeal [1] - The appeal concerns $1.8 billion in assets held in an HSBC account in Hong Kong [1]