2026-01-06 02:23Summary of Key Points from the Conference Call Companies and Industry Involved - Broadcom Inc (AVGO): Added to the US Conviction List - Dick's Sporting Goods Inc (DKS): Added to the US Conviction List - Capital One Financial Corp (COF): Removed from the US Conviction List - Cadence Design Systems Inc (CDNS): Removed from the US Conviction List - Houlihan Lokey Inc (HLI): Removed from the US Conviction List Core Insights and Arguments Broadcom (AVGO) - Broadcom is expected to leverage its dominant position in enterprise networking silicon, which is projected to drive a majority share in customer silicon processors for major US hyperscalers, with AI expected to comprise over 40% of the company by 2026 [7] - The Street is believed to be underestimating the momentum in AVGO's AI optical networking business, with strong momentum reported from recent checks in Asia [7] Dick's Sporting Goods (DKS) - The acquisition of Foot Locker (FL) is seen as a strategic move to revitalize the sneaker category, with expectations of FL's gross margins increasing by 500 basis points [8] - The focus on near-term inventory build at FL is viewed as overshadowing the long-term strategic opportunity for both DKS and FL [8] Additional Important Content Market Commentary - The year 2025 was characterized by "noise, quiet, and transition," with significant policy changes and market dynamics impacting investor sentiment [10][11][12] - The S&P 500 EPS estimates for 2026 have risen by 6% over the year, indicating upward earnings momentum despite the surrounding noise [12] Themes to Watch in 2026 1. AI & Power: Transitioning to a new phase with emerging companies like AVGO gaining traction [18] 2. Drug Development: A shift towards new products in the GLP-1 category, with LLY outperforming NOVO [18] 3. Blurring Lines in Retail: Opportunities arising from eCommerce platforms driving revenue through advertising and alternative revenue streams [18] 4. China's Economic Growth: Expected above-consensus growth driven by technology advancements [19] 5. Productivity-Driven Margin Growth: Risks associated with a jobless expansion due to tech-driven productivity improvements [20] Performance Insights - The Conviction List has seen significant idiosyncratic returns, with a focus on identifying stocks expected to outperform regardless of sector or macro exposure [24][26] - The list's hit rate, which measures the percentage of stocks outperforming the benchmark, stands at 46% relative to the S&P 500 [32] Changes in the Conviction List - Added: Broadcom (AVGO) and Dick's Sporting Goods (DKS) [34] - Removed: Capital One Financial (COF), Cadence Design Systems (CDNS), and Houlihan Lokey (HLI) [35] Stock Performance - DKS has a price target of $285, representing a 42% upside from its current price of $200 [3] - AVGO has a price target of $450, indicating a 29% upside from its current price of $348 [3] This summary encapsulates the key points from the conference call, highlighting the companies involved, core insights, and additional important themes and performance metrics.