Core Insights - Year-end window dressing is influencing institutional investors to buy top-performing stocks for favorable year-end reports, with the S&P 500 up over 16% year to date and the Dow Jones near record highs [1][6] Portfolio Repositioning Drives Late-Year Activity - Institutional investors are focusing on AI-infrastructure stocks, with notable performers like Micron Technology, Western Digital, and Palantir Technologies showing returns of 196.4%, 194.2%, and 139.7% respectively, significantly outperforming the S&P 500's 16.4% growth [2][6] Company-Specific Developments - **Western Digital**: Gained inclusion in the Nasdaq-100 effective Dec. 22, prompting index-tracking funds to buy shares. It is viewed as a top pick for 2026 due to storage supply constraints [3] - **Micron Technology**: Upgraded to Buy by Bank of America after strong earnings, with high-bandwidth memory sold out through 2026 and multiyear customer agreements in place [3] - **Palantir Technologies**: Major stakeholders Vanguard and BlackRock increased their stakes by 4% and 6.4% respectively, indicating strong institutional confidence in its AI-software positioning [3] Market Outlook - The Federal Reserve's recent rate cut to 3.50-3.75% reflects a cautious approach amid inflation concerns, yet AI infrastructure spending is driving market momentum [6][7] - Nvidia reported Q3 revenues of $57 billion, up 62% year over year, while Broadcom's AI semiconductor revenues surged 74% year over year, indicating strong demand in the AI sector [8] Earnings Projections - Major financial institutions project significant earnings growth for 2026, with JPMorgan setting a baseline S&P 500 target of 7,500, Goldman Sachs projecting 12% earnings growth, and Morgan Stanley forecasting 17% expansion driven by AI productivity gains [9][10] Company Growth Potential - **Micron Technology**: Projected revenues of $18.7 billion for Q2 2026 with 68% gross margins, supported by a $20 billion capital investment to meet AI data center demand [11] - **Western Digital**: Revenues surged 27% year over year to $2.82 billion, with strong second-quarter guidance projecting $2.9 billion in revenues [12] - **Palantir Technologies**: Contracts include a $448 million U.S. Navy deployment, with third-quarter U.S. commercial revenues up 121% year over year, indicating strong growth potential [13]