Group 1 - StubHub Holdings Incorporated (NYSE:STUB) is recognized as a strong communication services stock by hedge funds, with a bullish rating from Wedbush analyst Scott Devitt, who lowered the price target from $22 to $18, indicating an upside potential of over 43% [1] - Consensus views suggest an upside of above 89% for StubHub Holdings, with a 1-year median price target of $23.80 as of December 7, supported by coverage from 13 analysts, including 8 Buy and 5 Hold ratings [3] - StubHub operates as a ticket exchange and resale marketplace, utilizing data intelligence and AI capabilities to enhance user experience on its platform [4] Group 2 - The broader consumer internet sector saw robust returns in 2025, with an average of 23% across 24 covered companies, outperforming the NASDAQ's 19% return, although 2026 is expected to present different challenges influenced by trends such as AI monetization and autonomous vehicle disruption [2]

Jefferies lowered the firm’s price target on Progress Software (PRGS) to $45 from $50 and keeps a Hold rating on the shares. The firm believes 2026 will be “another year of gradual AI monetization,” but thinks more meaningful growth contribution and acceleration are needed to ease AI disintermediation fears, requiring more selectivity, the analyst tells investors in an outlook note on the software group. “While we remain confident that value will ultimately accrue to the software layer, investors may need ...

29 December 2025 | 9:07AM HKT Equity Research Kingsoft Office (688111.SS): WPS Premium discount to engage new AI users and drive ARPU expansion; Buy Kingsoft Office (KO) is now offering higher discounts for WPS Premium, which includes AI features from late Nov (Exhibit 1), to engage more AI users and drive ARPU expansion. Compared to the promotion season last year, KO is now integrating WPS AI membership into WPS Premium, and is offering a higher discount rate for Premium membership to encourage users' adop ...

Group 1 - Kanzhun Ltd. has solid revenue growth momentum and recovering profitability, with positive progress in AI monetization, maintaining a buy rating [1] - The author emphasizes a diverse investment approach, incorporating fundamental, technical, and momentum investing strategies to enhance the investment process [1] Group 2 - No stock or derivative positions are held in the companies mentioned, and there are no plans to initiate any positions in the near term [2] - The article reflects the author's personal opinions and is not influenced by any business relationships with the companies discussed [2]

Internet stocks are entering 2026 on shaky footing after lagging behind the broader market in 2025, as execution missteps, intensifying generative AI competition, and uneven margins overshadow a relatively stable macroeconomic backdrop, raising the stakes for companies to demonstrate real AI-driven growth and profitability.JP Morgan analyst Bryan M. Smilek said internet stocks trailed both the S&P 500 and the Russell 2000 in 2025, attributing the gap to operational missteps, mounting competitive threats fro ...

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the global equity market outlook for 2026, emphasizing the impact of AI, fiscal stimulus, and regional market preferences. Core Themes and Arguments 1. **AI Trade Expansion**: The next phase of the AI trade is expected to broaden beyond major players, with software infrastructure and non-US companies capturing more economic benefits [2][8][76]. 2. **US Earnings Growth**: Earnings growth is anticipated to broaden, with the "Magnificent 7" slowing to 18% year-over-year by Q4 2026, while the S&P 493 is expected to increase EPS growth to 17% from 9% [3][25]. 3. **Cyclicals Outperforming**: Cyclical sectors are projected to lead as the economy remains resilient, supported by AI investments and fiscal stimulus across major economies [3][42]. 4. **International Equities**: A weaker USD is expected to favor international equities, particularly in Emerging Markets (EM) and Europe excluding the UK [4][59]. 5. **Global Investor Shift**: There is a notable shift towards non-US AI stocks, with EM and Japan offering attractive growth opportunities at lower valuations [5][76][78]. 6. **Valuation Support**: Despite elevated equity valuations, they are supported by rising return on equity (ROE) and lower cost of equity (COE) [6][97]. 7. **Retail Investor Demand**: Retail investors are expected to remain significant buyers, with potential inflows from time deposits into equities if the Federal Reserve eases [5][112][113]. Important but Overlooked Content - **AI Adoption Metrics**: AI adoption among US companies is increasing, with 45% of firms having paid AI model subscriptions, indicating a growing trend that may not yet be fully priced into the market [9][19]. - **Cost Control Strategies**: Companies are expected to leverage operating leverage and cost control to enhance earnings, as evidenced by a rise in WARN notices indicating targeted layoffs rather than acute stress [26][27]. - **Cyclicals and Consumer Discretionary**: The consumer discretionary sector may show resilience despite mixed signals, supported by fiscal measures and lower interest rates [44][45]. - **European Banks**: European banks are positioned for growth with strong earnings revisions and attractive valuations compared to US peers [45][101]. - **Emerging Market Dynamics**: EM equities are becoming more growth-oriented, with regulatory changes in markets like China promoting buybacks and reducing dilution [61]. Regional Preferences - **Overweight**: Emerging Markets (prefer China and South Africa), Europe excluding the UK (favoring Germany, banks, and industrials). - **Neutral**: US (favoring cyclicals over defensives, avoiding small caps). - **Underweight**: Japan (cautious on banks, preferring materials) [5][59]. This summary encapsulates the key insights and themes discussed in the conference call, providing a comprehensive overview of the anticipated trends and dynamics in the global equity market for 2026.

Summary of Key Points from the Conference Call Industry and Company Overview - The conference call focuses on the **US Equity Strategy** for the year ahead, particularly the **S&P 500** and its projected performance through 2026. Core Insights and Arguments 1. **S&P 500 Target for 2026**: The target for the S&P 500 is set at **7100**, indicating a **5% price return** from current levels, supported by a forecasted **14% earnings growth** or **$310** per share, despite a **10-point PE contraction** [1][18][19]. 2. **Market Sentiment**: Current market sentiment is described as contained rather than euphoric, with a recommended equity allocation of **56%**, which is below historical peaks [10][31]. 3. **Capex vs. Consumption**: There is an expectation of broadening capital expenditures (capex) over consumption, with a shift towards **blue-collar jobs** as AI impacts white-collar employment [2][12][13]. 4. **Sector Adjustments**: The outlook for **Consumer Staples** has been raised to **overweight** from **underweight**, while **Consumer Discretionary** has been lowered to **underweight** from **marketweight**. The firm remains **overweight** on **Financials, Real Estate, Materials, Health Care, and Energy** [6][12]. 5. **AI Investment Outlook**: There is caution regarding AI investments, with a noted **air pocket** ahead as monetization remains uncertain. The capital intensity of hyperscalers has increased significantly, raising concerns about future returns [3][14][15]. 6. **Credit Cycle Concerns**: The credit cycle is anticipated to be different from previous cycles, with emerging issues in private lending and a potential increase in **bad vintage** private investments due in **2026** [4][16]. 7. **Earnings Growth and Valuation**: Earnings growth is expected to be in the mid-double digits, but multiples are projected to compress by **5-10%**. The fair value model estimates the S&P 500's fair value at **5900**, indicating a potential downside from current levels [10][21][22]. Additional Important Insights 1. **Liquidity Trends**: While liquidity has been strong, the direction is expected to worsen, with less emphasis on buybacks and more on capex [11][13]. 2. **Job Market Dynamics**: The job market is shifting, with a decrease in entry-level office jobs due to efficiency gains from AI, impacting consumption growth [12][13]. 3. **Valuation Metrics**: The S&P 500 is statistically expensive across multiple metrics, trading above historical averages, which raises concerns about future returns [55][56]. 4. **Investor Behavior**: Individual investors have significantly influenced market volumes, accounting for approximately **40%** of small-cap and **20%** of large-cap volumes this year [13]. This summary encapsulates the key points discussed in the conference call, providing insights into the expected performance of the S&P 500, sector adjustments, and broader market dynamics.

Core Insights - Berkshire Hathaway's latest 13F filing indicates a concentrated but active quarter for Warren Buffett, showcasing significant capital flows into select positions, reflecting classic Buffett investment strategies [1] Group 1: Major Purchases - **Alphabet (GOOGL)**: Berkshire doubled its position by adding 17,846,142 shares, now valued at nearly $4.3 billion, indicating high conviction in Alphabet's long-term AI monetization and advertising dominance [2] - **Sirius XM (SIRI)**: An increase of 5,030,425 shares (4.2%) reflects Buffett's strategy of accumulating stable cash-generating small-cap companies [3] - **Chubb Ltd (CB)**: A 4,299,111 share increase (15.9%) reinforces Berkshire's focus on insurance, strengthening its long-term underwriting capabilities [4] - **Domino's (DPZ)**: An addition of 348,077 shares (13.2%) highlights Buffett's preference for efficient capital allocation in the restaurant sector [5] - **Lamar Advertising (LAMR)**: A smaller addition of 32,603 shares (2.8%) suggests a potential influence from Todd Combs or Ted Weschler, focusing on stable, cash-rich businesses [6] - **Lennar (LEN & LEN.B)**: Small increases in homebuilder stocks align with Buffett's views on U.S. housing under-supply [7] Group 2: Investment Themes - **Long-term Growth and Competitive Advantages**: The investments reflect exposure to businesses with durable competitive advantages and attractive valuations relative to cash flows [9] - **Predictable Revenue Streams**: Companies like Chubb and Sirius XM offer predictable subscription revenues and high free cash flow yields, enhancing their investment appeal [10][11] - **Quality at Reasonable Prices**: Buffett's strategy emphasizes investing in high-quality franchises like Alphabet and Chubb, which are not deep-value stocks but are trading at fair prices [12] - **Active Capital Deployment**: Despite high cash levels, Berkshire continues to deploy capital into high-potential investments, indicating a proactive investment approach [13] - **Influence of Todd & Ted**: The additions to positions like Domino's and Sirius XM reflect the investment styles of Todd Combs and Ted Weschler, focusing on smaller but high-quality bets [14]

Group 1: AI Market Sentiment - Growing skepticism around artificial intelligence (AI) as a potential bubble, with experts suggesting it differs from the dot-com bubble and may take years to burst [1][2] - Bank of America analysts indicate no overbuilding of AI data centers due to limitations like power access and space [2] - JP Morgan Asset Management notes that current players are better capitalized than those during the dot-com era, with AI monetization already underway [2] Group 2: Michael Burry's Position - Michael Burry's hedge fund, Scion Asset Management, revealed a short position on Nvidia (NVDA) and Palantir (PLTR), causing significant industry concern [2] - Burry claims that AI hyperscalers are artificially inflating earnings by extending the useful life of assets, which he argues is a common modern fraud [4][6] - Allegations suggest that companies are manipulating depreciation figures to enhance earnings, raising serious concerns about accounting practices in the industry [5][6]

Core Opinion - There is a growing belief that shorting the entire AI sector may be a viable strategy due to the lack of monetization and sustainability in the business model, as most users do not pay for AI services [1][3][18] Industry Insights - The AI sector is characterized by significant investments, with trillions of dollars spent on infrastructure, data centers, and training models, yet the majority of users are not paying customers [3][4][19] - Companies that build specialized AI tools for specific industries, such as law, healthcare, and logistics, are seen as having better monetization potential compared to foundational AI builders [2][14] - A McKinsey study supports the notion that future AI monetization will rely on targeted, value-based services rather than broad, free offerings [2] Market Concerns - The current state of the AI market resembles a bubble, with hedge funds and analysts expressing concerns over inflated valuations, particularly in companies like Nvidia [3][7] - Reports indicate that AI monetization is still in its early stages, with consumer AI struggling to find sustainable revenue models and high infrastructure costs [3][19] - The prevailing business model of offering AI services for free is unsustainable, as historical precedents show that successful businesses typically require a substantial number of paying customers [5][18] Future Projections - The potential for an AI collapse is highlighted, as the inability to charge for AI services could lead to significant financial challenges for companies in the sector [18][20] - Companies that can adapt AI applications for specific business needs and charge for those services are projected to be more successful in the long run [14][19]