Key Takeaways IBM expands its watsonx AI to Datavault AI for secure edge computing in NY and Philadelphia.watsonx enables real-time data processing, analysis, and monetization with enhanced cybersecurity.The platform upgrade strengthens IBM's AI capabilities across cloud, edge, and on-premises environments.International Business Machines Corporation ((IBM) has extended its partnership with Datavault AI to deliver a secure, ultra-low-latency enterprise AI at the edge in New York and Philadelphia, using SanQt ...

Alphabet (NASDAQ: GOOGL) opened 2026 on a strong note, rising to a new all-time high of $330 on January 8, a day after being dubbed the king of all AI stocks by Cantor Fitzgerald. Now, yet another analyst is hyping GOOGL stock up.Namely, on January 12, Wells Fargo analyst Ken Gawrelski raised his Google stock price target from $268 to $350, keeping an ‘Equal Weight’ rating and suggesting an additional 6% upside from the record price in 2026. The upgrade reportedly comes as the firm’s attempt to rectify the ...

Artisan Partners, an investment management company, released its “Artisan Value Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The equity market rally persisted in the third quarter as investors ignored tariffs, buoyed by strong corporate earnings, rising AI investment, and prospects of economic support from US fiscal policy and lower interest rates. Against this backdrop, the fund’s Investor Class ARTLX, Advisor Class APDLX, and Institutional Class APHLX returned 0.8 ...

Market Overview - The Dow is up about 100 points, indicating a potential record close after a record yesterday [2][3] - The S&P 500 also closed at a record yesterday but is down about a third today, while the Nasdaq is down about half a percent [3][4] - The S&P equal weight index is outperforming the S&P 500, suggesting broadening participation in the market [4] Federal Reserve Insights - The Federal Reserve cut interest rates by a quarter percentage point, with dissent from three members [8][10] - Chicago Fed President Austin Goulby expressed a desire to wait for more inflation data before further cuts, indicating optimism for significant reductions in rates over the next year [9][10] - Kansas City Fed President Jeff Schmid believes inflation remains too high and the economy shows momentum, suggesting that policy is not overly restrictive [10][11] Technology Sector Performance - Broadcom's disappointing earnings report has significantly impacted the tech sector, contributing to its decline [6][7] - Despite the drop, Broadcom's stock is still up year-to-date due to investor confidence in its AI-related prospects [7] College Athletics and NIL Legislation - The Hustle Act aims to protect college athletes' name, image, and likeness (NIL) earnings by creating tax-advantaged savings accounts and capping agent fees [36] - NIL has become a multi-billion dollar business for college athletes, necessitating legislative measures to provide structure and support [37][38] - The legislation seeks to address the challenges faced by student-athletes in managing their new commercial opportunities while balancing academic commitments [39][41] Corporate Developments - Citigroup received an upgrade to overweight from JP Morgan, citing expected benefits from a solid economy and market activity [60] - Alphabet's price target was raised to $350 by TD Cowan, driven by increased search engagement and the success of its Gemini chatbot [61][62] - FMCC was double upgraded by Wedbush, with expectations of near-term action from the Trump administration to recapitalize the mortgage giant [63] Cryptocurrency Market - Bitcoin is rebounding after dipping below 90,000 earlier in the week, with analysts noting it has been stuck in a range of 85,000 to 95,000 for about a month [64] Electric Vehicle Sector - Rivian's stock is up significantly after NEM raised its price target, citing momentum in AI and autonomous driving [65][66] Banking Sector - UBS shares are rising after Swiss lawmakers proposed easing capital rules, which would lower funding costs for the bank [68]

Core Insights - The article emphasizes the importance of focusing on profitable leaders in the AI sector amid concerns of a potential bubble in AI stocks [1][10] - It highlights that while some AI stocks may be overvalued, established companies like Nvidia, Taiwan Semiconductor, and Alphabet are still generating significant earnings and should not be dismissed [7][10] Group 1: Profitability and Market Position - Investors should monitor the profitability of AI companies, as many currently lack profits, making it crucial to assess their path to profitability [4] - Nvidia holds an estimated 90% market share in data center GPUs, while Taiwan Semiconductor commands a similar share in advanced processors, indicating strong market dominance [6] - Alphabet is also a key player in AI, integrating AI into its services, which contributes to its profitability [6][7] Group 2: Market Dynamics and Future Outlook - Nvidia's third-quarter earnings increased by 60% to $1.30 per share, Taiwan Semiconductor's earnings rose by 39% to $2.92 per ADR, and Alphabet's earnings jumped by 35% to $2.87 per share [9] - The potential for a bubble may lead to a gradual deflation rather than a sudden collapse, with major players likely to experience less volatility compared to smaller, less profitable companies [11][12] - Diversification may be a prudent strategy for investors concerned about a bubble, as significant price declines could present buying opportunities for established companies like Nvidia, Taiwan Semiconductor, and Alphabet [15]

Group 1: Alphabet's Performance and AI Impact - Alphabet's Google Cloud Platform saw a 34% increase in revenue last quarter, reaching $15.2 billion, with an operating margin of 24% [1] - The backlog for Google Cloud grew by 82% year over year to $155 billion, indicating strong future demand [1] - In the search business, Alphabet's revenue growth accelerated to 15% year over year, driven by AI enhancements in search features [2] - The AI mode feature, which integrates the Gemini chatbot interface, has attracted 75 million daily users, contributing to overall query growth [2] - Investor sentiment is shifting positively towards Alphabet as it is recognized for its potential gains from AI advancements [3] Group 2: Bill Ackman's Investment Strategy - Bill Ackman has a concentrated investment strategy, with over half of his hedge fund's $16 billion portfolio in just three companies [4] - Ackman believes that concerns regarding AI chatbots threatening Alphabet are overstated, and he sees significant growth potential for the company [3] - Following positive news and strong earnings, Alphabet's stock price has risen significantly, trading at about 27 times forward earnings estimates [6] Group 3: Uber Technologies Overview - Ackman has built a substantial position in Uber Technologies, praising its profitability under CEO Dara Khosrowshahi [7] - Uber has formed partnerships with autonomous vehicle suppliers, including Alphabet's Waymo, enhancing its value proposition [8] - The company reported a 15% year-over-year increase in monthly active platform consumers and an 18% increase in total trips and gross booking volume [9] - Uber's adjusted EBITDA grew by 35% year over year, indicating strong operating leverage [10] - The company has initiated a $20 billion stock repurchase program, supporting expected adjusted earnings-per-share growth of around 30% [11] Group 4: Brookfield's Growth Potential - Brookfield is a diversified holding company with significant growth drivers in its insurance and asset management segments [12] - The insurance business has tripled its assets from $45 billion to $135 billion in three years, with potential growth to $600 billion [13] - Management anticipates $6 billion in net carried interest income over the next three years, significantly boosting earnings [14] - Ackman expects Brookfield's distributable earnings per share to grow by 30% starting next year, with the stock trading at less than 20 times trailing distributable earnings [15]

Group 1 - Alphabet has joined the $3 trillion market cap club, becoming the fourth company to achieve this milestone, alongside Apple, Microsoft, and Nvidia [1] - A favorable antitrust ruling allowed Alphabet to retain its Chrome browser and Android operating system, alleviating investor concerns and contributing to the stock's rise [2] - Alphabet's stock has increased over 70% since its April low, with its cloud-computing unit's revenue growing by 32% in Q2, driven by demand for AI offerings like the Gemini chatbot [3] Group 2 - Alphabet is diversifying beyond its advertising revenue, which constitutes over half of its income, by expanding its AI investments across various products [4] - YouTube has introduced new AI tools for content creators, enhancing video production and monetization opportunities, including AI-driven analytics and product tagging for shopping [6]

Core Viewpoint - The U.S. stock market has rebounded to record highs following a significant correction in early 2025, driven by strong second-quarter earnings, particularly from AI-powered technology companies, which are expected to sustain growth for several years [1]. Group 1: Alphabet - Alphabet reported a 14% year-over-year revenue growth in Q2 2025, reaching $96.4 billion, while maintaining healthy operating margins [4]. - The adoption of Alphabet's AI offerings is accelerating, with the Gemini chatbot achieving over 450 million monthly active users and processing nearly 980 trillion tokens in June 2025, almost double the previous month [5][6]. - Google Cloud's revenue surged 32% year-over-year to $13.6 billion, with a backlog of $106 billion, indicating strong future revenue visibility [7]. - The company is investing $85 billion in 2025 to expand its server and data center capabilities, positioning itself to capture the growing AI market [8]. Group 2: Microsoft - Microsoft experienced a 15% year-over-year revenue increase in fiscal 2025, totaling $281.7 billion, with operating income rising 17% to $128.5 billion [9]. - The Azure cloud platform saw a revenue surge of 34% to over $75 billion, supported by a robust AI ecosystem that includes over 100 million monthly active users of its Copilot apps [10]. - GitHub Copilot is widely adopted, with 90% of Fortune 100 companies utilizing it, and the number of enterprise customers increased by 75% quarter over quarter [11]. - Microsoft has committed $368 billion in future revenue, with a 98% recurring revenue base, making it a strong contender in the AI space [13]. Group 3: ServiceNow - ServiceNow's subscription revenue grew 21.5% year-over-year to $3.1 billion in Q2 2025, with remaining performance obligations rising 25.5% to $23.9 billion [14]. - The company boasts a 98% renewal rate, indicating strong customer retention, and closed 89 deals exceeding $1 million in net new annual contract value [14]. - ServiceNow offers a comprehensive AI platform that integrates various AI technologies, enabling businesses to manage AI workflows effectively [15]. - The NOW Assist product suite, which integrates generative AI capabilities, is experiencing strong demand, evidenced by an increase in deals and usage [16][17].

Core Viewpoint - Alphabet is positioned as a strong investment opportunity in the AI sector, despite some analysts labeling it as an AI loser due to competition from ChatGPT [5][15]. Group 1: Alphabet's Growth Potential - Alphabet has significant growth potential from AI through its various subsidiaries and user data advantages from platforms like Google and YouTube [5][6]. - The integration of AI is enhancing Google Search, with AI overviews increasing in search results and the Gemini chatbot improving conversational queries [6]. - Google Cloud is experiencing rapid growth, with a year-over-year revenue increase of 28%, approaching $50 billion in annualized revenue [7]. Group 2: Profit Margins and Financial Outlook - Alphabet plans to invest $75 billion in capital expenditures by 2025, primarily for AI, which may lead to increased depreciation but also potential profit margin expansion [10]. - The operating margin for Google Cloud reached 18% recently, with expectations for further growth as the business scales [10][11]. - Alphabet's operating margin recently hit a record of 33%, with projections suggesting it could reach 40% in the long term, similar to Microsoft [11]. Group 3: Shareholder Returns and Valuation - Alphabet is returning capital to shareholders through buybacks and dividends, with a current dividend yield of 0.42% and a 12% reduction in shares outstanding over the past decade [14]. - The company has a P/E ratio of 21, the lowest among the "Magnificent Seven" stocks, indicating it may be undervalued given its growth prospects in AI and cloud computing [15].

Group 1: Alphabet (GOOG, GOOGL) - Alphabet is positioned for steady growth due to its diverse AI and cloud computing initiatives, with Google Search generating approximately $200 billion in annual revenue and rapidly integrating AI tools [4][6] - The Google Cloud division is the fastest-growing segment, achieving a 28% year-over-year revenue growth last quarter, indicating strong demand for its advanced computing infrastructure [6][7] - The stock is currently trading at a price-to-earnings (P/E) ratio of 20, which is below the S&P 500 average, making it an attractive investment opportunity for long-term returns [7] Group 2: Amazon (AMZN) - Amazon Web Services (AWS) is the largest cloud computing division in the industry, generating over $100 billion in revenue and more than $41 billion in operating income, positioning Amazon for significant growth in the cloud sector [9] - Amazon's retail sales in North America reached nearly $400 billion over the last 12 months, with e-commerce still representing less than 20% of overall retail sales in the U.S., providing a substantial growth opportunity [10] - The company has integrated its commerce and media offerings, leading to an operating margin of 6% in North American retail, with expectations for margin expansion in the coming years [11] - Amazon's annual revenue is currently $650 billion with an 11% profit margin, and projections suggest it could reach $1 trillion in revenue with a 20% profit margin over the next five years, resulting in $200 billion in annual earnings [12] - With a market cap of $2.4 trillion, Amazon's P/E ratio could approach 10 if earnings reach $200 billion, reinforcing its status as a blue-chip stock [13]