Introduction

This is a quick test to see how LLMs will rank equities for 2026. This is not statistically or scientifically rigourous – it is also not original. However, I think it will be fun to see what they identify.

I plan on updating these results periodically to see how each model did.

Summary Results

All Picks

Most Common Longs

Most Common Shorts

Methodology

I will ask several different models the same prompt.

Act as a professional equity analyst. Using the latest available data and news, recommend 5 long and 5 short stocks. For each: thesis, catalysts, valuation vs peers, and key risks. Provide citations for factual claims and include a one-page summary table at the end.

Models

I will test the results for several different models

1. Chatgpt 5.2
2. Gemini 3 pro
3. Grok 4.1 Thinking
4. Claude Opus 4.5
5. Deepseek

Results

Chatgpt 5.2

Equity Analyst Report

5 Long Ideas & 5 Short Ideas (Latest Public Data) Not investment advice

🟢 Long Ideas

NVIDIA (NVDA) — Long

Thesis NVIDIA remains the dominant “picks-and-shovels” provider for AI compute, benefiting from explosive data center demand and platform-level pricing power.

Catalysts

• Continued AI infrastructure buildout across hyperscalers and enterprises
• New platform cycles and networking attach rates

Valuation vs Peers

• Forward P/E: ~mid-20s
• Cheaper than AMD on forward earnings despite stronger AI positioning

Key Risks

• AI capex digestion cycles
• Export controls and geopolitical risk
• Competition from custom silicon

Microsoft (MSFT) — Long

Thesis Microsoft monetizes AI better than any large-cap peer via Azure distribution and Copilot embedding across enterprise workflows.

Catalysts

• Azure growth acceleration driven by AI workloads
• Copilot monetization across Office, GitHub, and Windows
• Massive commercial backlog conversion

Valuation vs Peers

• Forward P/E: ~30–31x
• Slight premium to Google, justified by enterprise AI penetration

Key Risks

• AI ROI timing
• Regulatory scrutiny
• Capex intensity

Amazon (AMZN) — Long

Thesis Amazon combines AWS re-acceleration, advertising margin expansion, and structurally improved retail efficiency.

Catalysts

• Global cloud spending rebound
• AWS operating leverage
• Continued ad revenue growth

Valuation vs Peers

• Forward P/E: high-20s
• Reasonable vs MSFT and GOOGL given margin runway

Key Risks

• Consumer demand softness
• Cloud pricing pressure
• Execution on AI investments

Taiwan Semiconductor (TSM) — Long

Thesis TSMC is the irreplaceable backbone of advanced AI chip manufacturing with unmatched process leadership.

Catalysts

• Sustained AI accelerator demand
• Leading-edge node ramps
• Pricing power at frontier nodes

Valuation vs Peers

• Forward P/E: mid-20s
• Discounted relative to AI beneficiaries despite strategic importance

Key Risks

• Geopolitical escalation
• Cyclical semiconductor downturns
• Overseas fab execution risk

Costco (COST) — Long

Thesis Costco is a defensive compounder with best-in-class customer loyalty and pricing power via its membership model.

Catalysts

• Membership growth and high renewal rates
• Value proposition strengthens in macro slowdowns

Valuation vs Peers

• Forward P/E: low-40s (premium)
• Premium justified vs Walmart by consistency and loyalty economics

Key Risks

• Valuation compression
• Margin pressure from wages or logistics
• FX headwinds

🔴 Short Ideas

Tesla (TSLA) — Short

Thesis Tesla trades primarily on autonomy optionality while core EV margins and demand weaken, creating asymmetric downside.

Catalysts

• Margin compression or delivery misses
• Regulatory or execution delays in autonomy

Valuation vs Peers

• Forward P/E: ~200+
• Massive premium vs legacy automakers

Key Risks

• Breakthrough autonomy progress
• High-margin software revenue realization

Intel (INTC) — Short

Thesis Intel’s turnaround depends on flawless execution in a capital-intensive foundry business while facing intense competition.

Catalysts

• Continued foundry operating losses
• Product roadmap slippage

Valuation vs Peers

• Forward P/E distorted by weak earnings
• Inferior earnings quality vs NVDA/TSM

Key Risks

• Government subsidies
• Successful foundry customer wins
• Competitive CPU/AI products

Boeing (BA) — Short

Thesis Boeing remains an operational and reputational recovery story with ongoing certification and production risk.

Catalysts

• Program delays or FAA scrutiny
• Cash flow volatility

Valuation vs Peers

• Forward P/E unreliable due to depressed earnings
• Balance sheet more relevant than multiples

Key Risks

• Faster-than-expected delivery normalization
• Improved free cash flow trajectory

Warner Bros. Discovery (WBD) — Short

Thesis High leverage, legacy media decline, and deal uncertainty outweigh streaming improvements.

Catalysts

• M&A outcomes
• Advertising market softness
• Refinancing risk

Valuation vs Peers

• Earnings distorted
• Inferior profile vs DIS and NFLX

Key Risks

• Takeout at premium valuation
• Sustained streaming profitability

Carvana (CVNA) — Short

Thesis Operational recovery is impressive, but valuation prices in near-perfect execution through the cycle.

Catalysts

• Used-car price normalization
• Higher funding costs
• Margin compression

Valuation vs Peers

• Forward P/E: ~65x
• Massive premium vs CarMax (~14x)

Key Risks

• Continued market share gains
• Durable unit economics
• Lower interest rates

📊 One-Page Summary Table

If you want, I can:

• Convert this into PDF / investment memo format
• Build pair trades (long NVDA / short INTC, long COST / short WMT)
• Add expected return & probability-weighted outcomes
• Rewrite this as a Substack or hedge-fund style note

Gemini 3 Pro

Market Outlook: 5 High-Conviction Longs & 5 Shorts for 2026

Date: December 29, 2025 Category: Investing / Equity Research

As we close out 2025, the market has digested the initial wave of “AI Implementation” and is shifting focus toward Cash Flow Durability and Margin Resilience. While the broader S&P 500 has seen multiple expansion, we are seeing a widening divergence between capital-efficient compounders and capital-intensive speculative plays.

Below are my top 10 tactical ideas—5 Longs and 5 Shorts—entering Q1 2026.

The Long Portfolio (Buy)

1. Amazon.com Inc. (NASDAQ: AMZN)

• The Thesis: Amazon has successfully completed its “regionalization” logistics overhaul, resulting in record operating margins in the Retail segment for FY2025. Crucially, AWS has re-accelerated to mid-20% growth driven by enterprise generative AI inference workloads, which are distinct from the training-heavy Capex cycles of its peers.
• Catalysts: Q4 2025 earnings are expected to show a continued reduction in “cost to serve.” Additionally, the successful beta launch of Project Kuiper in early 2026 adds a new, high-potential revenue layer.
• Valuation: Trading at ~26x 2026E Earnings, AMZN trades at a discount to Microsoft (31x) and its own historical average, despite superior free cash flow (FCF) conversion.
• Key Risks: Ongoing FTC antitrust litigation and potential consumer spending slowdowns in H1 2026.

2. Eli Lilly & Co. (NYSE: LLY)

• The Thesis: The “Duopoly” in metabolic disease remains intact. LLY has successfully debottlenecked supply chains for Zepbound and Mounjaro. The bull case has now shifted to the pipeline: specifically, the oral GLP-1 (Orforglipron) and Retatrutide (triple-G), with phase 3 data expected mid-2026 promising higher efficacy than current injectables.
• Catalysts: FDA approval for the sleep apnea indication and monthly prescription data showing continued market share gains over Novo Nordisk.
• Valuation: The premium multiple (45x P/E) is justified by 30%+ CAGR revenue visibility through 2028.
• Key Risks: Drug pricing legislation and potential safety signals in long-term usage studies.

3. ServiceNow (NYSE: NOW)

• The Thesis: ServiceNow is arguably the cleanest “AI Software” winner. Their Pro Plus SKU (generative AI features) has seen the fastest adoption in company history throughout 2025. As enterprises cut “bloatware,” they are consolidating onto the NOW platform for IT, HR, and Customer Service workflows.
• Catalysts: Acceleration in Subscription Revenues in Q1 2026 guidance and continued high renewal rates (>98%) proving platform stickiness.
• Valuation: EV/Sales of 12x is reasonable relative to the “Rule of 40” (Growth + Margin) score, which is nearing 60.
• Key Risks: IT budget contraction in a recessionary environment and competition from Salesforce/Atlassian.

4. Spotify Technology S.A. (NYSE: SPOT)

• The Thesis: The “Margin Expansion” story is fully engaged. After successful price hikes in 2024/2025 and a significant reduction in podcasting losses, Spotify has become a cash-flow machine. The introduction of audiobook-only tiers and high-margin “Superfan” monetization features are driving gross margins toward 35%.
• Catalysts: Q4 MAU (Monthly Active User) growth beating expectations and new label negotiations reducing royalty payouts for functional noise/AI tracks.
• Valuation: PEG ratio < 1.0 based on explosive EPS growth from a low base.
• Key Risks: Pushback from music labels on bundling and TikTok Music’s expansion in Western markets.

5. KKR & Co. Inc. (NYSE: KKR)

• The Thesis: As public markets remain volatile, the shift to private credit and infrastructure persists. KKR is structurally advantaged in the Asset-Based Finance boom. Their insurance arm, Global Atlantic, provides permanent capital that allows them to scale credit platforms faster than competitors like Blackstone or Apollo.
• Catalysts: Anticipated interest rate cuts in 2026 boosting transaction fees and exit activity for private equity portfolios.
• Valuation: Trading at a discount to peers on a Distributable Earnings (DE) basis.
• Key Risks: Credit defaults in their private loan book and regulatory scrutiny on “shadow banking.”

The Short Portfolio (Sell)

1. Lucid Group (NASDAQ: LCID)

• The Thesis: Despite technology leadership, Lucid’s unit economics remain broken. Cash burn continued through 2025, and reliance on Saudi PIF capital raises creates massive dilution risk. The demand for “ultra-luxury” EVs has saturated, and they lack a mass-market vehicle with positive gross margins.
• Catalysts: Potential Q4 production guidance cuts and the announcement of another dilutive capital raise in H1 2026.
• Valuation: The Market Cap still implies a production scale they are years away from achieving.
• Key Risks: A full privatization buyout by the PIF at a premium (Short Squeeze risk).

2. Walgreens Boots Alliance (NASDAQ: WBA)

• The Thesis: The retail pharmacy model is structurally impaired. PBM (Pharmacy Benefit Manager) pressures have crushed reimbursement rates, and front-of-store retail sales are bleeding to Amazon and Costco. The dividend cut in 2024 was just the start; debt covenants are now a concern for 2026.
• Catalysts: Further store closure announcements and potential credit rating downgrades to junk status.
• Valuation: Appears “cheap” on P/E but acts as a value trap due to declining EBITDA and negative tangible book value.
• Key Risks: Sale of the Boots (UK) business providing a temporary cash infusion.

3. Unity Software (NYSE: U)

• The Thesis: Unity has lost trust with the developer community following the 2023/2024 pricing debacles, driving talent toward Unreal Engine (Epic Games) and Godot. Their “Grow” (Ads) business faces headwinds from privacy changes on iOS/Android, and synergies from the IronSource merger have underwhelmed.
• Catalysts: Q1 2026 earnings showing developer churn and mobile gaming ad-spend contraction.
• Valuation: Still trades at a tech growth multiple despite stalling growth (single digits).
• Key Risks: A buyout by a larger tech player (e.g., Meta or Apple).

4. AMC Entertainment (NYSE: AMC)

• The Thesis: The post-pandemic box office recovery has plateaued at ~85% of 2019 levels. AMC faces a massive debt wall in 2026. Dilution is the only tool left to service debt, but the share price is now too low to raise meaningful capital without wiping out equity holders entirely.
• Catalysts: “Going Concern” warnings in upcoming 10-K filings or restructuring talks leaking to the press.
• Valuation: Fundamentally disconnected; equity value is arguably zero in a restructuring scenario.
• Key Risks: “Meme stock” volatility or irrational rallies unrelated to fundamentals.

5. American Airlines (NASDAQ: AAL)

• The Thesis: AAL holds the highest leverage in the industry. While Delta and United have repaired their balance sheets, AAL remains burdened by debt from fleet renewals. With labor costs (pilot contracts) structurally higher in 2025/2026, margins are thin. Any softening in travel demand hits AAL’s equity harder than peers due to financial leverage.
• Catalysts: Rising jet fuel prices impacting Q1 margins and underperformance in high-margin international routes vs. United.
• Valuation: Discounts to peers are warranted and likely to widen.
• Key Risks: A sudden drop in oil prices boosting short-term cash flow.

Summary Table: Q1 2026 Outlook

Disclaimer: This post is for educational purposes only and does not constitute financial advice. All financial data is based on market conditions projected to December 29, 2025. Please do your own due diligence before investing.

Deepseek

Subject: Equity Strategy - Long/Short Recommendations
From: Professional Equity Analyst
Date: October 26, 2023
Note: All data and news are latest available as of this date. Prices and valuations are as of market close October 25, 2023.

Long Recommendations

1. Microsoft (MSFT)

• Thesis: Dominant cloud (Azure), generative AI leadership via partnership with OpenAI, and resilient software revenue. Azure is gaining share in cloud infrastructure, while Copilot monetization across Office/Windows provides a new growth vector.
• Catalysts:
  • Accelerating Azure growth from AI services demand (Q1 FY24 Azure revenue grew 29% constant currency).
  • Broad rollout of Microsoft 365 Copilot in Q4 2023 ($30/user/month premium).
  • Continued cost discipline improving operating margins.
• Valuation vs. Peers: Trading at ~30x forward P/E, premium to software peers (~25x) but justified by superior margin profile and AI positioning. Discount to high-growth cloud-only names.
• Key Risks: Regulatory scrutiny over OpenAI partnership and cloud practices; slowdown in enterprise IT spending; execution risk in AI monetization.
• Sources: Company Q1 FY24 Earnings Release (Oct 24, 2023); IDC Cloud Infrastructure Market Share data.

2. Palo Alto Networks (PANW)

• Thesis: Cybersecurity consolidator with best-in-class platform (Strata, Prisma, Cortex). Transition to platform-based sales drives higher margins and sticky recurring revenue (ARR >$3B). Secular tailwinds from escalating threats.
• Catalysts:
  • Continued platform consolidation wins and large deal momentum (>$20M deals grew 27% YoY in Q4 FY23).
  • Growth in next-gen security segments (SASE, Cloud Security).
  • Share buyback authorization of $1B.
• Valuation vs. Peers: Forward P/E of ~45x vs. high-growth security peer CrowdStrike (~60x). Relative discount given profitable scale.
• Key Risks: Intense competition from Fortinet, CrowdStrike; macroeconomic pressure on security budgets; integration challenges from acquisitions.
• Sources: Company Q4 FY23 Earnings Release (Aug 21, 2023); Gartner Magic Quadrant for Network Firewalls (2023).

3. Cheniere Energy (LNG)

• Thesis: Largest US LNG exporter with long-term, fee-based contracts providing visibility. Structural demand from Europe (replacing Russian gas) and Asia. Expansion projects (Corpus Christi Stage 3) to drive volume growth.
• Catalysts:
  • Final Investment Decision (FID) on additional liquefaction trains.
  • Contracting of remaining uncontracted capacity at higher rates.
  • Stronger-than-expected European winter demand.
• Valuation vs. Peers: Trading at ~10x EV/EBITDA vs. US E&P average ~5x, justified by contract durability and growth. Discount to European gas utilities.
• Key Risks: Global recession reducing gas demand; construction delays on new trains; regulatory hurdles for new US export permits.
• Sources: Company Investor Presentation (Oct 2023); EIA International Energy Outlook.

4. Danaher (DHR)

• Thesis: High-quality life sciences and diagnostics tool company. Post-pandemic inventory destocking headwinds are bottoming. Strong portfolio (Cytiva, Beckman) tied to biopharma production and R&D spend.
• Catalysts:
  • Recovery in bioprocessing demand as customer inventory normalizes (expected H2 2024).
  • Margin expansion from productivity initiatives and Vontier spin-off completed.
  • M&A in the life sciences tools space.
• Valuation vs. Peers: Forward P/E ~25x, in line with Thermo Fisher but at a discount to its historical average. Premium to broader industrials justified by recurring revenue.
• Key Risks: Prolonged biotech funding weakness; currency headwinds; execution risk on margin targets.
• Sources: Company Q3 2023 Earnings (Oct 24, 2023); Biopharma industry reports.

5. Progressive (PGR)

• Thesis: Leading auto insurer with superior data analytics and direct-to-consumer model. Pricing power in hard market conditions offsetting claims inflation. Demonstrated underwriting discipline (combined ratio consistently below peers).
• Catalysts:
  • Continued premium growth (policy growth + rate increases).
  • Moderation of used car price and parts inflation improving loss costs.
  • Share gains from smaller, less efficient competitors.
• Valuation vs. Peers: Trading at ~20x forward P/E, premium to Allstate (~15x) but justified by superior growth and profitability metrics (ROE >25%).
• Key Risks: Catastrophe losses from severe weather; regulatory pushback on rate hikes; reversal in used car prices.
• Sources: Company September 2023 Monthly Earnings Release; III (Insurance Information Institute) industry data.

Short Recommendations

1. Tesla (TSLA)

• Thesis: Overvalued given increasing competitive pressures in EVs, margin compression from aggressive price cuts, and cyclical demand concerns. Growth trajectory is slowing while valuation implies continued dominance.
• Catalysts:
  • Further margin erosion reported in Q4 earnings.
  • Disappointing Cybertruck ramp-up (production complexity, niche appeal).
  • Increased discounting by legacy OEMs (Ford, GM) and Chinese rivals (BYD).
• Valuation vs. Peers: Forward P/E ~60x vs. legacy OEMs at ~5x-7x and pure-play EV rival Lucid at negative earnings. Extreme premium despite growth deceleration.
• Key Risks: Successful launch of lower-cost model; resolution of autonomous driving technology; Elon Musk-led sentiment surge.
• Sources: Company Q3 2023 Earnings (Oct 18, 2023); Cox Automotive EV Sales Data.

2. Beyond Meat (BYND)

• Thesis: Structurally unprofitable business model with declining revenues. Consumer fatigue with plant-based meat category, inferior taste/price value proposition vs. real meat, and rising input costs.
• Catalysts:
  • Ongoing quarterly losses and cash burn.
  • Downward revisions to revenue guidance.
  • Potential need for dilutive capital raising.
• Valuation vs. Peers: Trading at ~2x Price/Sales vs. food peers at ~1.5x, but peers are profitable. No clear path to profitability.
• Key Risks: Strategic partnership with a major food company; drastic cost reduction breakthrough; category re-acceleration.
• Sources: Company Q2 2023 Earnings (Aug 8, 2023); NielsenIQ/IRI US retail sales data for plant-based meat.

3. Walgreens Boots Alliance (WBA)

• Thesis: Struggling retail pharmacy model with intense pressure from Amazon, insurers (CVS Caremark), and supermarkets. Core pharmacy margins under PBM pressure. Failed healthcare pivot (VillageMD closures).
• Catalysts:
  • Further guidance cuts as US consumer spending weakens.
  • Dividend sustainability concerns (yield >9% signals market doubt).
  • Downward EPS revisions from opioid settlement charges.
• Valuation vs. Peers: Forward P/E ~6x, a discount to CVS (~8x), but justified by inferior growth prospects and balance sheet stress.
• Key Risks: Successful turnaround under new CEO; faster-than-expected healthcare services profitability; asset sales.
• Sources: Company Q4 FY23 Earnings (Oct 12, 2023); CDC Retail Pharmacy Data.

4. Zoom Video Communications (ZM)

• Thesis: Post-pandemic normalization causing stagnant growth. Product is a feature within larger platforms (Microsoft Teams, Google Meet). Struggling to expand beyond core meetings into unified communications.
• Catalysts:
  • Slowing enterprise customer growth and declining online revenue.
  • Increased competition from bundled offerings at lower cost.
  • Margin pressure from R&D and sales investments to fuel growth.
• Valuation vs. Peers: Forward P/E ~15x, a discount to software peers, but growth rate is lower (<5% expected revenue growth FY24).
• Key Risks: Successful adoption of Zoom Phone/Contact Center; acquisition target for a larger player; new AI features driving differentiation.
• Sources: Company Q2 FY24 Earnings (Aug 21, 2023); Gartner Market Guide for Meeting Solutions.

5. Lucid Group (LCID)

• Thesis: Luxury EV startup with unsustainable cash burn, production delays, and weak demand (multiple production cuts). High price point enters a competitive segment with Tesla Model S, Mercedes EQE.
• Catalysts:
  • Further production/delivery misses.
  • Dilutive capital raising needed given cash position (~$5.2B end-Q2, burning >$700M/quarter).
  • Weak reservation book growth for Gravity SUV.
• Valuation vs. Peers: Market Cap ~$12B despite minimal volume (<10k cars annually). Implied value per car vastly exceeds legacy luxury makers.
• Key Risks: Strategic investment from Saudi PIF providing infinite lifeline; breakthrough in technology or cost reduction; acquisition.
• Sources: Company Q2 2023 Production & Delivery Data (July 12, 2023); Q2 2023 Financials.

One-Page Summary Table

All valuation metrics are approximate based on consensus estimates. Source for all peer comparisons: Bloomberg, Refinitiv consensus as of Oct 25, 2023.

Grok

Long Recommendations

1. Nvidia (NVDA)

• Thesis: Nvidia holds a dominant position in AI infrastructure with its GPUs, software like CUDA, and full-stack offerings, capturing over 90% market share in data center GPUs. Sales are projected to grow 36% annually through 2033 due to AI demand.
• Catalysts: Earnings expected to rise 48% annually through FY2028, driven by new AI chip launches and expanding data center partnerships.
• Valuation vs Peers: Trading at 47x earnings, premium to peers like AMD (40x) and INTC (20x) but justified by superior growth; median target $250 (31% upside).
• Key Risks: Potential shift by tech giants to in-house chips or alternative suppliers could erode market share.

2. Broadcom (AVGO)

• Thesis: Broadcom benefits from AI infrastructure spending, with revenue up 25% in FY2025 and AI business expected to double in 2026.
• Catalysts: Increasing demand for custom AI chips and networking solutions, with strong partnerships in cloud and data centers.
• Valuation vs Peers: Trading at ~35x earnings, in line with semi peers like NVDA (47x) and QCOM (28x); average target $456 (30% upside).
• Key Risks: Higher total cost of ownership for custom chips compared to off-the-shelf options could slow adoption if costs rise.

3. Eli Lilly (LLY)

• Thesis: Leading pharma stock with blockbuster drugs in diabetes and weight loss, positioned for growth in biotech amid aging populations and health trends.
• Catalysts: Pipeline expansions and regulatory approvals for new therapies; expected earnings growth from global market penetration.
• Valuation vs Peers: Trading at ~50x earnings, higher than peers like NVO (40x) and MRK (25x) but supported by 20%+ revenue growth projections.
• Key Risks: Patent expirations or competition from generic alternatives could pressure margins.

4. JPMorgan Chase (JPM)

• Thesis: Premier bank with diversified operations in consumer, investment banking, and asset management, benefiting from economic recovery and higher interest rates.
• Catalysts: Potential rate cuts in 2026 boosting lending; acquisitions and digital banking expansions driving fee income.
• Valuation vs Peers: Trading at 12x earnings, discount to peers like BAC (13x) and WFC (11x); strong upside in stable economy.
• Key Risks: Regulatory changes or economic slowdown impacting loan quality and net interest margins.

5. Bristol-Myers Squibb (BMY)

• Thesis: Undervalued pharma giant with a robust drug portfolio and pipeline, focusing on oncology and immunology.
• Catalysts: Cost-cutting initiatives and new pipeline programs offsetting patent cliffs; newer therapies gaining market share.
• Valuation vs Peers: Significantly undervalued at ~15x earnings vs peers like PFE (20x) and ABBV (18x); fair value $66 (potential 30% upside).
• Key Risks: 47% revenue exposure to patent cliffs through 2028, potentially leading to revenue drops if replacements underperform.

Short Recommendations

1. Tesla (TSLA)

• Thesis: Overvalued EV leader facing slowing demand and unproven long-term profitability in autonomous driving.
• Catalysts: Potential margin compression from price cuts and competition in EV market.
• Valuation vs Peers: Trading at 183x earnings, far above peers like F (10x) and GM (6x) despite 13.7% expected growth.
• Key Risks: Short-term momentum from robotaxi hype could delay re-rating if execution succeeds.

2. Apple (AAPL)

• Thesis: Reliance on maturing iPhone cycle and saturated services market limits growth potential.
• Catalysts: Decelerating innovation and possible regulatory scrutiny on app store practices.
• Valuation vs Peers: Trading at 29x earnings, premium to peers like GOOGL (25x) and MSFT (34x) with only 7.6% expected growth.
• Key Risks: Successful AI integration in devices could revive upgrade cycles.

3. Microsoft (MSFT)

• Thesis: Elevated valuation assumes perpetual dominance in cloud and AI, but competition is intensifying.
• Catalysts: Moderation in cloud spending or antitrust actions could pressure growth.
• Valuation vs Peers: Trading at 38x earnings, above peers like AMZN (37x) and GOOGL (25x) despite 14.9% expected growth.
• Key Risks: Continued AI investments yielding high returns could justify premium.

4. Amazon (AMZN)

• Thesis: Ambitious AI and cloud growth assumptions untested, with margin conversion challenges.
• Catalysts: Rising competition in e-commerce and cloud from Walmart and Azure.
• Valuation vs Peers: Trading at 37x earnings, similar to MSFT (38x) but high vs WMT (25x) for 12%+ expected growth.
• Key Risks: Strong AWS performance in AI could exceed expectations.

5. Meta Platforms (META)

• Thesis: Growth hinges on uncertain metaverse and AI ad platforms amid user engagement risks.
• Catalysts: Regulatory scrutiny or slowdown in ad spending due to economic factors.
• Valuation vs Peers: Trading at 27x earnings, in line with GOOGL (25x) but vulnerable vs SNAP (negative) for 10-12% expected growth.
• Key Risks: Successful metaverse adoption could drive unexpected upside.

Claude Sonnet 4.5

LONG POSITIONS

1. NVIDIA Corporation (NVDA) - STRONG BUY

Current Price: ~$131 | Target Price: $180 | Upside: 37%

Investment Thesis: NVDA remains the dominant AI infrastructure provider with unmatched pricing power and market positioning. The company’s GPUs sell for approximately $30,000 compared to the average chip price of $2.40, demonstrating extraordinary value capture. CEO Jensen Huang indicated management has “visibility” into $500 billion of demand for its key data center technology over the next five quarters.

Key Catalysts:

• Blackwell GPU ramp expected to drive sequential revenue growth through 2026
• Recent acquisition of Groq assets valued at approximately $20 billion strengthens competitive moat in AI inference
• Data center platform revenue of $51.2B in fiscal Q3, representing 90% of total revenue

Valuation vs Peers: Trading at 25x forward earnings with 29-46% expected EPS CAGR through FY2028. PEG ratio of approximately 0.6x represents a significant discount to S&P 500’s ~2x multiple. Projected free cash flow of $500B over next three years supports valuation.

Key Risks:

• Rising competition from AMD, custom ASICs by hyperscalers (Google TPU, Amazon Trainium)
• China export restrictions limiting TAM by ~10-15%
• Supply chain concentration risk with TSMC manufacturing dependency

2. Broadcom Inc. (AVGO) - BUY

Current Price: ~$225 | Target Price: $290 | Upside: 29%

Investment Thesis: Broadcom has become the critical supplier of custom AI ASICs and networking infrastructure for hyperscalers seeking alternatives to Nvidia. The company has pivoted from component supplier to a pillar of AI infrastructure with a $1.6 trillion market cap. AI semiconductor revenue is expected to more than double in Q1 fiscal 2026.

Key Catalysts:

• Custom ASIC design wins with Google, Meta, and emerging AI leaders (Anthropic, OpenAI)
• AI-related products represented over half of Broadcom’s semiconductor revenue in 2025
• VMware acquisition proving accretive with software segment growing nicely

Valuation vs Peers: Trading at 32x forward earnings following recent 20% pullback from highs. Despite premium to sector average (18x), justified by 74% YoY AI semiconductor growth and operating margins near 50%. Stock trades below AMD (35x) and well below Palantir (150x+).

Key Risks:

• Customer concentration with top hyperscalers (Google, Meta)
• Timing delays as some customers defer custom chip purchases to 2027 and beyond
• Margin pressure from mix shift to lower-margin custom products

3. Taiwan Semiconductor (TSM) - BUY

Current Price: ~$195 | Target Price: $245 | Upside: 26%

Investment Thesis: TSM is the indispensable manufacturing partner for the entire AI chip ecosystem. The company generates 57% of revenue from high-performance computing market, which includes Nvidia’s data center GPUs. Every major chip designer (NVDA, AMD, AVGO) relies on TSM’s cutting-edge fabrication capabilities.

Key Catalysts:

• 3nm and 2nm node production ramp supporting AI chip demand
• Arizona fab expansion reducing geopolitical risk premium
• Analysts expect TSMC’s revenue and EPS to grow at a CAGR of 24% and 27% respectively from 2024-2027

Valuation vs Peers: Trading at 19x forward earnings - compelling valuation for 24-27% expected growth. Dividend yield of 1.1% provides income component. Trades at meaningful discount to pure-play chip designers despite superior capital efficiency.

Key Risks:

• Taiwan geopolitical tensions with China
• Customer concentration (Apple and Nvidia represent ~35% of revenue)
• Capital intensity requires sustained high capex (~$30B+ annually)

4. JPMorgan Chase (JPM) - BUY

Current Price: ~$245 | Target Price: $295 | Upside: 20%

Investment Thesis: The six largest U.S. banks have gained $600 billion in market value in 2025, with total market cap reaching $2.37 trillion. JPM is the industry fortress benefiting from deregulation, M&A resurgence, and excess capital deployment. Goldman analysts estimate policy changes will give US banks between $180-200 billion in excess capital by end of 2026.

Key Catalysts:

• Investment banking fees surging on M&A rebound
• JPMorgan planning to add close to $10 billion in expenses to fuel growth in credit cards, branches, and AI investments
• Basel III Endgame rules expected to be more favorable than initially proposed

Valuation vs Peers: Trading at 12x forward earnings with ROE consistently above 15%. Dividend yield of 2.1% with consistent payout growth. Trades at premium to BAC (10x) and C (9x) but justified by superior execution and market leadership.

Key Risks:

• Net Interest Income (NII) pressure if Fed pauses rate cuts longer than expected
• Consumer credit quality deterioration in recessionary scenario
• Regulatory risk if political winds shift back toward stricter oversight

5. Micron Technology (MU) - BUY

Current Price: ~$95 | Target Price: $135 | Upside: 42%

Investment Thesis: The demand for high-bandwidth memory (HBM) chips used in AI data centers is booming. Micron supplies critical HBM3E chips to Nvidia, AMD, and other AI accelerator manufacturers. Management raised server growth forecast for 2025 to high teens percentage range, up from prior 10% expectation.

Key Catalysts:

• HBM chip supply shortage driving pricing power and margin expansion
• Market researcher IDC expects global AI infrastructure spending to hit $758 billion in 2029
• Memory market consolidation (Samsung, SK Hynix, Micron oligopoly)

Valuation vs Peers: Trading at 15x forward earnings - deeply discounted to AI chip peers. Expected EPS growth of 40%+ in FY2025-2026 creates compelling risk/reward. Memory cycles historically mean-reverting, currently in strong upcycle.

Key Risks:

• Memory pricing cyclicality - significant downside if oversupply develops
• Customer concentration (NVDA, AVGO represent significant portion)
• Korean competitors (Samsung, SK Hynix) ramping competing HBM production

SHORT POSITIONS

1. Palantir Technologies (PLTR) - STRONG SELL

Current Price: ~$77 | Target Price: $35 | Downside: 55%

Investment Thesis: PLTR represents the most egregiously overvalued large-cap stock in the market. At around $155 per share, the company’s market cap of nearly $370 billion implies a valuation of 360-times trailing earnings and 153-times forward earnings. With its 2-star rating, Morningstar believes Palantir’s stock is overvalued compared with their long-term fair value estimate of $115 per share.

Key Catalysts:

• Valuation compression as growth expectations normalize
• Trading at approximately 100 times revenue, roughly 500% premium over other AI-oriented companies
• Retail ownership of 40-50% creates significant selling pressure risk

Valuation vs Peers: PEG ratio of 4.2x (using 36.8% consensus growth rate) vs. comparable software companies trading at 1-2x. Comparable companies: Snowflake trades at ~13x sales (vs. PLTR’s 100x), Datadog at 16x sales with similar growth profiles.

Key Risks to Short:

• Retail investor enthusiasm could extend overvaluation
• Strong commercial segment growth momentum (54% YoY U.S. commercial)
• Government contract wins providing revenue visibility
• Short squeeze risk given negative sentiment already priced by institutions

2. Walgreens Boots Alliance (WBA) - SELL

Current Price: ~$9 | Target Price: $5 | Downside: 44%

Investment Thesis: Walgreens is the worst performer in 2024, plunging more than 64%, on track for its biggest annual drop in history and eighth losing year of the last nine. The retail pharmacy model faces structural headwinds with no clear path to recovery.

Key Catalysts:

• Continued market share loss to online pharmacies (Amazon Pharmacy, Mark Cuban Cost Plus)
• Store closure acceleration (1,200+ stores targeted)
• GLP-1 weight loss drugs reducing prescription volumes for chronic conditions
• Private equity interest (Sycamore Partners) likely represents floor, not upside

Valuation vs Peers: Trading at 7x forward earnings appears optically cheap but reflects structural decline. CVS Health (9x) provides better execution despite similar challenges. Negative cash flow generation limits financial flexibility.

Key Risks to Short:

• Takeover bid could provide exit at premium (albeit limited upside from current levels)
• Cost restructuring benefits could materialize faster than expected
• Pharmacy benefit manager (PBM) reform could improve reimbursement rates

3. Intel Corporation (INTC) - SELL

Current Price: ~$19 | Target Price: $13 | Downside: 32%

Investment Thesis: Intel is on pace for a loss of more than 60% in 2024, its worst year on record, and was removed from the Dow with Nvidia selected as its replacement. The company has lost the technology lead to TSMC, market share to AMD in CPUs, and missed the AI GPU opportunity entirely.

Key Catalysts:

• CEO Pat Gelsinger pushed out by board in December signals fundamental strategic failure
• Foundry business burning billions with no path to competitiveness vs. TSMC’s 3nm/2nm nodes
• PC and server CPU share losses continuing to AMD

Valuation vs Peers: Trading at 35x forward earnings but negative free cash flow makes traditional valuation metrics misleading. AMD (35x) growing rapidly while INTC shrinking. Enterprise value reflects hope for foundry turnaround that appears increasingly unlikely.

Key Risks to Short:

• U.S. government CHIPS Act subsidies could provide lifeline
• Foundry spinoff or restructuring could unlock value
• New CEO could pivot strategy successfully
• China +1 manufacturing trend could benefit U.S.-based production

4. Moderna (MRNA) - SELL

Current Price: ~$38 | Target Price: $25 | Downside: 34%

Investment Thesis: Moderna tumbled more than 60% in 2024, slated to go down as the company’s worst year on record. COVID vaccine revenue has collapsed and the pipeline lacks near-term commercial catalysts to replace lost revenues.

Key Catalysts:

• COVID vaccine revenue declining 80%+ from peak levels
• RSV vaccine (mRESVIA) uptake disappointing vs. expectations
• Pipeline primarily early-stage with no major approvals expected before 2027-2028
• Continued cash burn of $1B+ quarterly straining balance sheet

Valuation vs Peers: Trading at 5x forward sales but sales declining rapidly. BioNTech (comparable mRNA platform) faces similar challenges. Traditional biotech valuation frameworks difficult given negative earnings and cash burn.

Key Risks to Short:

• Cancer vaccine trials could show breakthrough efficacy
• COVID variant could drive renewed vaccine demand
• Partnership deals could provide validation and capital
• mRNA platform optionality provides long-term call option value

5. Dollar Tree (DLTR) - SELL

Current Price: ~$72 | Target Price: $52 | Downside: 28%

Investment Thesis: Dollar Tree declined significantly in 2024, with inflation’s effect on consumer spending hitting the discount retailer. The company faces a strategic crisis as the $1.25 price point becomes unsustainable while higher prices alienate core customers.

Key Catalysts:

• Family Dollar segment continues underperforming with store closures accelerating
• Private label competition from Walmart, Target intensifying
• Shrink (theft) and operating cost inflation compressing margins
• Middle-income consumer trading down to discount retailers reducing differentiation

Valuation vs Peers: Trading at 11x forward earnings - appears reasonable until accounting for negative same-store sales trends and margin compression. Five Below (15x) and Dollar General (13x) better positioned with clearer strategies.

Key Risks to Short:

• Family Dollar divestiture could unlock value and simplify story
• Recession could paradoxically drive traffic to dollar stores
• Turnaround execution under new management
• Activist investor involvement could force strategic changes

SUMMARY TABLE

PORTFOLIO CONSTRUCTION NOTES

Long Portfolio Themes:

• AI infrastructure buildout (NVDA, AVGO, TSM, MU): 70% of capital
• Financial deregulation beneficiary (JPM): 30% of capital
• Focus on companies with pricing power and secular growth tailwinds

Short Portfolio Themes:

• Valuation extremes disconnected from fundamentals (PLTR)
• Structural business model disruption (WBA, DLTR)
• Technology/competitive obsolescence (INTC)
• Post-pandemic revenue cliff (MRNA)

Risk Management:

• Position size limits: 25% max for longs, 15% max for shorts
• Stop loss on longs: 15% from entry
• Stop loss on shorts: 25% from entry (covering on strength)
• Portfolio beta target: 1.1-1.3x to S&P 500

Macro Overlay:

• Portfolio positioned for continued AI spending cycle through 2026-2027
• Benefits from deregulation under new administration
• Hedged against overvaluation correction in momentum names
• Minimal energy exposure given oversupply outlook per EIA forecasts

Disclosure: This analysis is for informational purposes only and should not be considered investment advice. All investors should conduct their own due diligence and consult with qualified financial advisors before making investment decisions.

Data Sources: Market data as of December 29, 2025. Analyst estimates from consensus forecasts. Company fundamentals from latest quarterly reports and guidance.

Next steps

1. Continously update the results to see how the stock picks perform
2. Generate a similar report focused on small cap stocks which might have more pricing inefficiencies