Group 1 - SGA's U.S. Large Cap Growth Strategy reported a portfolio return of -1.3% (Gross) and -1.4% (Net) in Q3, underperforming the Russell 1000 Growth Index which returned 10.5% and the S&P 500 Index which returned 8.1% [1] - The investment objective of SGA is to focus on high-quality growth businesses expected to achieve consistent mid-teens earnings growth, stable revenue, and cash flow [1] - In Q3, lower-quality stocks and cyclical industries outperformed, negatively impacting SGA's investment style [1] Group 2 - Alphabet Inc. (NASDAQ:GOOG) was highlighted as a key stock in SGA's third-quarter investor letter, with a one-month return of -1.44% and a 52-week gain of 64.61% [2] - As of December 31, 2025, Alphabet's stock closed at $313.80 per share, with a market capitalization of $3.78 trillion [2] Group 3 - Alphabet Inc. contributed positively during the quarter, benefiting from a favorable outcome in a key antitrust case, which allowed the company to retain its core assets and business model [3] - The company reported strong Q2 results with 13% constant currency revenue growth, increased normalized margins, and accelerated paid click growth [3] - Notable growth in cloud backlog increased from 27% to 37%, with the number of cloud deals over $250 million doubling year-over-year [3] - Alphabet's leadership in AI, search, and cloud is translating into financial results, prompting management to increase the CapEx budget for further innovation [3] - Despite regulatory risks, Alphabet's diversified revenue streams and strategic investments position it well for continued growth, making it a compelling long-term investment [3]

Core Viewpoint - Amazon underperformed the market in 2025, with a stock increase of only 6% compared to the S&P 500's 18% gain, but this underperformance may set the stage for a stronger performance in 2026 [1][2] Group 1: Amazon Web Services (AWS) - AWS is experiencing significant growth, benefiting from the general migration to cloud computing and its role in artificial intelligence, as companies prefer renting computing power rather than building their own data centers [4][6] - In Q3, AWS revenue rose 20% year over year, marking its fastest growth rate in several years, and accounted for 66% of Amazon's operating profits during that quarter [7] Group 2: Advertising Services - Amazon's advertising services generated $17.7 billion in revenue during Q3, contributing significantly to the company's overall profitability, with an estimated operating profit of $5.3 billion based on typical advertising margins [8] - The advertising division posted a 24% year-over-year growth rate, indicating its critical role in enhancing Amazon's commerce operating margins and setting the company up for a strong 2026 [9] Group 3: Valuation and Growth Expectations - Amazon's stock valuation has become more reasonable, now trading at a level comparable to its peers, allowing for potential stock price appreciation aligned with business performance [10][12] - Analysts expect Amazon to grow sales at around 11% in 2026, with operating profit growth anticipated to outpace revenue growth, driven by strong results from AWS and advertising services [13]

Core Viewpoint - The article discusses three distinct AI stocks that investors should consider for long-term investment, highlighting their unique attributes and potential in the AI sector. Group 1: Alphabet (GOOGL) - Alphabet is characterized as a stable investment with a high floor due to its established position in AI and cloud computing, making it a reliable choice for investors [5][8] - The company reported a market capitalization of $3.8 trillion and generated $74.1 billion in revenue from its core digital advertising business in Q3 [7] - Alphabet's ongoing investments in autonomous vehicles and quantum computing further enhance its growth prospects, making it a dependable option for buy-and-hold investors over the next three to five years [8] Group 2: Tesla (TSLA) - Tesla represents a high-risk, high-reward investment, with CEO Elon Musk emphasizing the potential value of its humanoid robot, Tesla Optimus [9][12] - The company has a market cap of $1.5 trillion, but its core vehicle business has faced challenges in recent quarters, which could impact stock performance [10][12] - The humanoid robotics market is projected to grow into a $5 trillion total addressable market by 2050, presenting significant upside potential for Tesla [11] Group 3: International Business Machines (IBM) - IBM is positioned as a rare AI dividend stock, appealing to investors seeking income alongside growth, with a dividend yield of 2.27% [13][15] - The company has a market cap of $277 billion and has raised its dividend for 29 consecutive years, reflecting its long-term growth capabilities [14][15] - IBM is actively expanding its AI ecosystem through mergers and acquisitions, with anticipated earnings growth at a high-single-digit annualized rate over the next three to five years [16]

Core Viewpoint - The iShares Expanded Tech Sector ETF has shown strong performance driven by major technology companies, particularly in the AI sector, and is expected to continue outperforming the S&P 500 in 2026 [2][12]. Group 1: ETF Performance - The iShares Expanded Tech Sector ETF achieved a return of 27.5% in 2025, significantly surpassing the S&P 500's 17.5% return [2]. - Since its inception in 2001, the ETF has consistently outperformed the S&P 500, with a compound annual return of 11.6% compared to the S&P 500's 8.5% [12]. - Over the last decade, the ETF's accelerated compound annual return reached 22.9%, while the S&P 500 grew by 13.4% annually [12]. Group 2: Portfolio Composition - The ETF holds 291 stocks, primarily in the technology sector, with nearly 27% of its portfolio invested in semiconductor stocks [4]. - The top 10 holdings of the ETF account for 56% of its total weight, including major companies like Nvidia (8.92%), Microsoft (8.87%), and Apple (8.55%) [5][6]. - Other notable AI-related stocks in the ETF include Palantir Technologies, which saw a 139% stock gain due to high demand for its AI software products [10][11]. Group 3: Market Trends and Future Outlook - Major tech companies are expected to increase spending on AI data centers and infrastructure in 2026, which will likely benefit stocks like Nvidia, Broadcom, AMD, and Micron [13]. - Cloud platforms operated by Alphabet and Microsoft are experiencing accelerating revenue growth, indicating successful investments in AI infrastructure [13]. - The dynamic nature of the tech sector suggests that even if the AI boom slows, other technologies such as robotics and quantum computing could drive growth for the ETF [14].

Core Insights - Alphabet Inc. is a leading technology platform with a diverse portfolio including Search, YouTube, Android, Chrome, Google Cloud, and digital advertising, dominating global search traffic and online video consumption [2] - The company benefits from strong network effects, extensive computing infrastructure, and advancing AI capabilities, maintaining a robust economic moat in the technology sector [2] DCF Analysis - The DCF model uses a discount rate of 10% and a terminal growth rate of 3%, forecasting free cash flows (FCF) from 2025 to 2029, totaling a present value of $340.4 billion [3] - The terminal value, calculated using a perpetuity growth model, is approximately $1,397.9 billion, leading to a present value of the terminal value of $972.6 billion [3] - The enterprise value of Alphabet is calculated to be $1,313.0 billion [3] Net Debt and Equity Value - Alphabet has cash and equivalents of $98.5 billion and total debt of $33.7 billion, resulting in a net debt of -$64.8 billion [4] - The equity value is estimated at $1,377.8 billion, with an intrinsic value per share of approximately $114 based on shares outstanding of about 12.08 billion [4] Conclusion - The DCF value of Alphabet is $114, while the current market price is around $316, indicating a margin of safety of -64% [5] - Despite being a highly cash-generative business with strong positions in various sectors, the stock is trading above its intrinsic value, reflecting investor confidence in future growth and AI monetization [5][6] - For long-term investors, Alphabet presents significant scale and balance sheet strength, but the current price suggests limited margin of safety, indicating that future growth may already be priced in [6]

Core Viewpoint - Google achieved its strongest performance since 2009, with Alphabet's stock rising 65% in 2025, outperforming other tech giants [2][3] Stock Performance - Alphabet's stock saw a significant increase of 65% for the year, surpassing gains from 2021, with shares hitting a low in April before rebounding over 100% [2] - Among tech companies valued over $1 trillion, Alphabet was the largest gainer, while Broadcom and Nvidia followed with gains of 49% and 39% respectively [2] AI Developments - Google faced skepticism regarding its ability to maintain dominance in the AI era, particularly with competitors like OpenAI's ChatGPT [2] - The Gemini app, launched to compete with ChatGPT, gained traction, surpassing 5 billion images generated and topping the Apple App Store [4] - Google expanded its AI talent pool by acquiring key personnel from the AI startup Windsurf for $2.4 billion [5] Legal and Regulatory Environment - A U.S. District Judge ruled against severe consequences for Google in an antitrust case, allowing the company to retain its Chrome browser and continue paying for default search engine placements [6][7] Market Position and Growth - Gemini's usage share increased to approximately 18%, while ChatGPT's share dropped to about 68% [8] - Analysts believe Google's AI investments are positively impacting its core search business, with expectations for a 15% revenue growth in Q4 2025 [10][11] Financial Outlook - Alphabet raised its capital spending forecast for 2025 to $93 billion, with projections for 2026 exceeding $114 billion [12] - Google's cloud business signed more deals over $1 billion in 2025 than in the previous two years combined, indicating strong demand [12] Analyst Sentiment - Despite potential risks from OpenAI's financial obligations, analysts maintain a buy rating on Alphabet's stock, raising the price target to $400, approximately 28% above its recent closing price [13] - Analysts predict a market shakeout similar to 2000, with Google positioned to lead among fewer dominant competitors [14]

Core Viewpoint - MongoDB, Inc. (NASDAQ:MDB) is identified as a high-growth large-cap stock with a "Buy" rating and a price target of $475.00, reflecting its strengthening fundamentals and future growth potential [1][2]. Group 1: Financial Performance - After a challenging 2024, MongoDB experienced a significant turnaround in 2025, improving operating margins and reviving momentum in its Atlas business [2]. - The leadership changes within the company have coincided with improved execution, leading to positive investor sentiment [2]. Group 2: Market Position and Trends - MongoDB is positioned at the intersection of key trends in databases, cloud computing, and generative AI, despite facing a tough competitive and macroeconomic environment [3]. - The Atlas product has exited a prolonged slump, showing sustained acceleration in growth, primarily driven by core database use cases and strong demand from major U.S. customers and EMEA [4]. Group 3: Product and Service Offering - MongoDB offers a general-purpose database platform that is well-suited to support emerging AI agents and high-growth AI-native businesses that require a scalable and modern data platform [4].

U.S. stock futures are trading in negative territory to start the last trading day of 2025. Wall Street ended in the negative zone in the last three trading days. Financial researchers are skeptical of a Santa Rally this time. Wall Street’s rally of U.S. stocks in 2023 and 2024 continued in 2025, albeit at a slow pace. Year to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — are up 13.7%, 17.3% and 21.5%, respectively. In 2023, the Dow, the S&P 500 and the Nasdaq Composi ...

Industry Overview - The global drone industry is experiencing significant growth, with a projected CAGR of 14.3% from 2025 to 2030, driven by increased adoption in commercial, government, and military sectors [2] - The integration of drones with AI, cloud computing, and edge processing is enhancing their adoption across various verticals [2] Company Analysis: Ondas Holdings (ONDS) - Ondas Holdings is an emerging player in the drone market, with its Ondas Autonomous Systems (OAS) business transitioning into a high-growth segment, reporting $10 million in revenues for Q3 2025, up from $1 million in the same quarter last year [5] - The company has a backlog of $22.2 million for OAS and a consolidated backlog of $23.3 million, which includes acquisitions [5] - Ondas is actively pursuing mergers and acquisitions (M&A) to expand its portfolio, having acquired several companies recently, including Sentrycs and Apeiro Motion, and is in the process of acquiring Roboteam [6] - As of September 30, 2025, Ondas had $433.4 million in cash and has raised $855 million since June to support its expansion plans [7] - The company faces challenges due to its heavy reliance on the OAS division for revenue growth, which could lead to significant revenue declines if major customers delay or cancel orders [7] - Rapid acquisitions may lead to integration overload risks, increasing expenses and execution challenges [8] - Ondas Networks is expected to see "meaningful adoption" by railroads in 2026, but current revenue expectations are modest compared to OAS [9] Company Analysis: AeroVironment (AVAV) - AeroVironment is a well-established leader in the drone industry, benefiting from strong ties with the U.S. military and allied governments, and is a key player in the rising demand for military drones [12] - The company reported a total ceiling value of contract awards reaching $3.5 billion in Q2 fiscal 2026, with bookings of $1.4 billion [13] - AeroVironment continues to invest in R&D and manufacturing, unveiling new drone models and expanding its software ecosystem, including the launch of AV_Halo Cortex and AV_Halo Mentor [14] - The company expects revenues between $1.95 billion and $2 billion for fiscal 2026 [15] - However, AeroVironment's extensive exposure to government contracts poses customer concentration risks, with potential impacts from shifts in defense budgets and procurement delays [16] Performance and Valuation Comparison - Over the past six months, Ondas Holdings has seen a stock gain of 357.7%, while AeroVironment's stock has decreased by 3.2% [18] - Ondas is trading at a forward 12-month price/earnings ratio of 23.1X, significantly higher than AeroVironment's 5.47X [20] - Analysts have revised earnings estimates for Ondas upward by 9.7% over the past 60 days, while AeroVironment's estimates have been revised downward by 4.4% [21][24]

Market Overview - U.S. stock futures are trading negatively as Wall Street has ended in the negative zone for the last three trading days, raising skepticism about a Santa Rally this year [1] - The major stock indexes have shown year-to-date increases: Dow up 13.7%, S&P 500 up 17.3%, and Nasdaq Composite up 21.5% [1] Historical Performance - In 2023, the Dow, S&P 500, and Nasdaq Composite rallied by 13.7%, 23.3%, and 43.4% respectively, while in 2024, they advanced by 12.9%, 23.3%, and 28.6% respectively [2] Future Outlook - Financial analysts are hopeful for a continued rally in 2026, driven primarily by the global AI technology boom, which has transformed the IT sector [3] - The AI infrastructure capital expenditure is projected to exceed $1 trillion by 2028, with estimates reaching $5 trillion cumulative by 2030 [4] AI Infrastructure Investment - Four of the "magnificent 7" stocks are set to invest $380 billion in 2025 for AI infrastructure development, marking a 54% year-over-year increase in capital spending [5] - These companies anticipate further increases in AI capital expenditure in 2026 [5] Earnings Expectations - Wall Street analysts are optimistic about Q4 2025 earnings, with 18 S&P 500 companies reporting a 32.2% increase in total earnings year-over-year, driven by a 9% rise in revenues [6][7] - The overall earnings for the S&P 500 are expected to rise by 7.6% in Q4 2025, with revenues increasing by 7.7% [7] Interest Rate Outlook - The Federal Reserve has lowered the benchmark lending rate by 75 basis points in 2025, following a 1% reduction in 2024, with the current rate at 3.50-3.75% [8] - Market participants are anticipating two additional rate cuts of 25 basis points each in 2026, with a 60% probability for the first cut in April [8]