Spreadsheets Started It And AI Finishes It

June 20, 2026 | Season 8 | Episode 20

One oil chokepoint can shake the entire tape, and this morning’s market setup makes that painfully clear. We start with the Strait of Hormuz and the high-stakes back-and-forth between the US, Iran, and regional players, then translate the geopolitics into the language investors care about: crude oil pricing, energy volatility, inflation expectations, and how quickly sentiment can flip in futures and equities.

We dig into the “safe passage” dispute inside the US–Iran memorandum of understanding, where a single phrase can be read as freedom of navigation or as a claim of sovereign control. That legal gray zone helps explain why tanker harassment, drone strikes, and sudden pauses in hostilities can all occur with the ink barely dry. We also layer in the Lebanon and Hezbollah angle and the tightrope Washington walks in supporting Israel while trying to keep a fragile deal from blowing up.

Then we zoom out and do something most market commentary skips: we look backward to move forward. The 1980s personal computer and spreadsheet boom rewired Wall Street dealmaking, and the echoes are loud in today’s AI revolution. From hedge funds using large language models to parse global central bank speeches, to the open question of whether AI creates productivity or reduces headcount, we frame what “disruption” can actually look like in real markets.

We close with investable themes: drone warfare upending defense economics, Micron’s effort to reshape the memory cycle amid AI demand, Alphabet’s dip and valuation debate, and high-yield income ideas across bonds, dividend ETFs, and mortgage-backed securities. If you found this helpful, subscribe, share the show with a friend, and leave a review so more investors can find us.

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Transcript

Quarter End And Holiday Setup

Alan Eppers 0:00

And now introducing Mr. Keith Lanton.

Keith Lanton 0:03

Good morning. Today is uh Monday, June 29th. Uh, one more day to go till uh the end of uh second quarter, the conclusion of the first half of uh 2026. This week, holiday shortened week, July 4th, uh falling on Saturday, and the financial markets uh will be closed on Friday, July 3rd. So uh wishing everyone a safe and happy 4th of July and happy birthday to America, celebrating our uh 250th birthday here in the United States of America. So as uh we celebrate and look forward to another 250 years of American success, we take a step back to take a look at financial markets specifically, which are increasingly intertwined with what's taking place throughout the world, with uh the situation, specifically the situation in the Middle East, because the Middle East, uh, as it has been the case for almost a century now, critically uh tied into uh global financial markets uh because of uh fossil fuels, and that remains the case even as the world seeks to diversify, which is a trend that I think uh will continue as we seek to build out uh alternatives to fossil fuels, alternatives to the current supply routes uh which uh take place uh uh significantly through the Straits of Hormuz. I would anticipate that although it will take time as uh tensions uh continue to increase uh with respect to the Straits of Hormuz, and talk about uh charging tolls, and we'll talk a little bit about that, both uh the Iranians and the Omanians uh speaking about that, that uh countries like Saudi Arabia and Bahrain and the UAE may seek uh other avenues to export their precious uh fossil fuels outside of the Straits of Hormuz. So in the meantime, as uh this chess match plays out uh between the U.S. and its allies and Iran, we will continue to see volatility in energy and oil prices, and we will talk a little bit about this this back and forth, this chess match, uh so to speak, high stakes one between the U.S. and our allies, including Israel and the uh other uh Gulf states and Iran, and we'll talk about why this this strategic s strategic maneuvering is taking place at this time and what implications that may have for the markets. Then we'll take a little bit of a dive back and take a look at previous technologies that have upended Wall Street. Uh last week we talked about uh the founding of the New York Stock Exchange and the initial IPO which uh caused that initial founding was really the catalyst for the founding of uh the agreement to start the New York Stock Exchange. And here we'll take a look at history, and we'll take a look back at history and take a look at uh the first real computer revolution as uh as it pertained to mergers and acquisitions companies and how that may affect your thinking about uh artificial intelligence and what that may mean for investing going forward if we can learn a little bit about uh what happened uh in the 19 uh seventies and nineteen eighties. And then we'll take a look at the news this morning, uh specifically what's going on in the Middle East and energy prices and uh financial markets and news flow, and then we'll move on to uh take a look at uh Barron's uh little bit of a review of last week, and then Barron's uh talking about uh the revolution that's taken place in warfare, which is uh another direct uh result of uh some of the changes that have taken place in computer technology, especially as it pertains to uh drones and how drones are uh upending warfare. Obviously very relevant uh to the United States and what's taken place in Iran, and we got a significant introduction to that uh based on the Russian experience uh with Ukraine and drones and how we may want to think about investing in defense stocks uh going forward. And then if we still have time, we'll talk a little bit about two big uh U.S. technology companies, one which has uh been significantly on the rise, that is Micron, and another one that uh had been on the rise and has hit a little bit of selling pressure, and that is Alphabet, and then we will uh take a look at uh fixed income or income really, and uh Baron's uh talking about the best high-yield income investments going into the second half of uh 2026. So, whole lot to talk about.

The Strait Of Hormuz Chess Match

Keith Lanton 4:31

Let's uh dial it back, let's go back uh to the high stakes, uh keep using this analogy, chess match uh over the Straits of Hormuz, and what is Iran doing is they currently are flexing their muscles. So you may be saying to yourself, well, why is Iran attacking tankers like they did uh on the end of uh last week and they did over the weekend, given that uh there has been a memorandum of understanding signed between the U.S. and Iran, and strategists suggesting that what Iran is doing is they are probing, testing, flexing muscles, testing U.S. resolve, recognizing that uh the United States may have some vulnerabilities, not necessarily because uh the United States is uh inferior militarily, but because politically President Trump, the Iranians very well aware of the political situation here in the United States, recognizing that President Trump ran on two major domestic promises. One, keeping inflation down, two, avoiding endless wars. So the Iranians are aware that President Trump is right now seeking to keep oil prices contained. At the same time, he is seeking relative calm ahead of the elections. So Iran is uh perhaps uh testing, probing, gambling, playing the odds, seeing how far they can push the United States, and this is uh important information to them so they can assess uh how far they can uh press as they go back and forth at the negotiating table and trying to determine how much pain a protracted war or the uncertainty and higher oil prices uh could influence uh President uh Trump and the U.S. uh decision-making process. And this isn't just a two-country analysis. This is, you know, this is 4D chess, so to speak, complexity deepening, especially when it comes to Lebanon. And interestingly, uh the United States uh agreed to take on the responsibility to pressure Israel to cease its incursions into Lebanon. The catch here is that uh Washington expects Iran to restrain Hezbollah, which, while heavily armed and dominant, operates as a non-state actor distinct from the uh formal Lebanese government. And then adding to the complexity here over the weekend, we had the Lebanese government uh saying that they are agreeing to remove or restrain Hezbollah in Lebanon, and big questionnaire is whether or not uh they have the capabilities and uh whether or not they need to seek the help of uh Israel, who they are more closely aligning with, and whether or not uh that could disrupt uh some of the agreements between the U.S. and Iran. So for President Trump enforcing the boundary here in the in the uh shraits of Hormuz is the only way to wind down the conflict and uh honor his uh promise to stop regional wars. At the same time, Israel is pushing forward to secure its borders. So at the moment, uh the United States is in the position of trying to manage our ally Israel's fears, while at the same time keeping a volatile peace deal with uh Iran from going up in flames, all of this while the Iranians uh are probing and testing to see uh how much control they can uh exercise over the uh Straits of Hormuz.

Safe Passage Clause And Oil Risk

Keith Lanton 8:01

Now, speaking of that, specific waterway, the Straits of Hormuz, right now, if you uh want to uh get a little bit uh detailed and the details are starting to become critically important, you may remember that uh the United States and Iran signed a memorandum of understanding to end the conflict and keep the vital oil choke point open. But what's taken place here is that uh both the U.S. and Iran are viewing certain language or interpretations of a single clause within that memorandum of understanding, specifically Article V, which is the safe passage rule. The United States views safe passage through the lens of international maritime law. So to us here in the United States, it means the freedom of navigation, which means unobstructed, continuous transit for global trade, free from Iranian interference or unilateral traffic stops. Iran is saying that they are reading Article V as a confirmation of their sovereign authority. Iran is arguing that they are designated managers of the strait because the word before safe passage is facilitating safe passage. So they believe that that word facilitating gives them the right to police the waters, at least that's what they're claiming, and that they can demand that vessels coordinate directly with the Iranian government as to how they transit the Straits of Hormuz. So because of these clashing viewpoints, the ink is uh barely dry, and we are seeing drone strikes, and again, perhaps uh the Iranians uh understand very well what it is that the United States meant when they said safe passage, but nevertheless they are testing, probing, and determining how much the United States means what they say. President Trump has demonstrated that these incursions, these attacks on these ships will not go unanswered, and has struck back at Iran by attacking some of those uh drone facilities and uh some coastal regions over the weekend. And here we are come Monday morning, and uh we are getting word and news that we are going to again see a halt to hostilities, and this is leading to uh at the moment some further upside uh to the stock market. We're seeing uh futures right now up about 220 points on the Dow, almost 300 points on the NASDAQ, but interestingly uh oil prices uh this morning are up about a little under a barrel, a dollar per barrel. So uh we will uh of course uh continue to see, and each side will continue to test, and we will continue to see if this piece holds and if this piece can be propensed or move forward into the future. So as we try to assess the future of what's going to take place in the Middle East and the implications uh on financial markets, which are ramifications of not only the price of oil and energy and the amount of money that uh is being expended on defense, but all of this will also have uh significant implications uh for the political process, what happens in the midterms, and all of that comes back and uh influences the stock market and financial markets, not just here in the United States, but throughout the world. So that's one big thing we've got going on. Another major theme we've got going on, which is leading to some of the strength that we're seeing in technology and financial markets, is what's taking place in artificial intelligence and what's taken place in space with companies uh like SpaceX, which we talked uh at length about uh their initial public

Spreadsheets Then AI Now

Keith Lanton 11:49

offering. And when we think about artificial intelligence and the power it has to uh change and revolutionize things in ways that are unforeseen, what we can do is uh go back and we can take a look at a change that took place in the 1980s. You may or may not have been alive then, but if you went back to the 1980s, at that time most financial firms employed dozens, if not if not hundreds, and perhaps at big firms, if not thousands, of professionals who went around using something known as pens and and and paper, and new inventions like calculators in order to do financial analysis, in order to decide whether or not uh company A should merge with company B and under what terms. And if you go back to the uh early to mid-1980s, there was this new technology coming to the forefront, and that was uh personal computers. And at the time, personal computers were were viewed more as uh a toy than they were something that you could actually utilize. But a few small, arguably at the time, some would say scrappy startups started using things like uh VisiCalc and then Lotus 123. These were technologies that enabled you to do spreadsheets and calculations uh for the first time. And we saw that there were some startups uh bragging to journalists uh that they can replace teams of analysts with a single spreadsheet. Some echoing that we hear today when it comes to teams of analysts and some of the uh capabilities that uh artificial intelligence may be able to replace. These teams of analysts that were supposed to be replaced back in the 1980s because of spreadsheets. Today these teams of analysts are going to be replaced because of uh artificial intelligence. And if you go back to the 1980s, you could see how revolutionary spreadsheets were. Suddenly, analysts, investment banks could do stuff like change margin assumptions and see how that changes cash flows all by changing a cell in a spreadsheet. You could see how a whole new world was opening up for financial analysis. In fact, William Deringer, who is at MIT, wrote a paper called Michael Milken's Spreadsheets, Computation and Charisma in Finance and the Go-Go 1980s. And he said when asked to explain the unprecedented financial turmoil of the 1980s, Michael Milken claimed the true culprit were the creators of VisiCalc, saying that that invention had single-handedly paved the way, and VisiCalc was the very first financial spreadsheet, by the way. And he said that that single invention had paved the way for the 1980s corporate mega deals. In the 1980s, first time you were seeing lots of uh lots of uh mergers and acquisition, acquisition and deals. And uh Michael Milken privately credited spreadsheet software with making pa it possible to model and market so swiftly uh what we call high yield bonds, which were junk bonds back then, which he pioneered, and he gave credit for that ability to proliferate that new financial instrument, and he credited the spreadsheet for doing it. Another startup company in the early 1980s, company today, well known for its private equity and private debt deals, company called KKR. Back then it was known as Colbert Kravis Roberts, today it's KKR, and an executive from KKR named Donald Hendrick said he stopped by a Manhattan Electronics store in the 1980s to purchase purchase a personal computer as entertainment for his children. And while he was there, he was experiencing an enterprise sales associate who showed him this program, which we mentioned, VisiCalc. And he suddenly became enthralled by the ability of VisiCalc to recalculate projections instantaneously upon changing one's cell. And he went on to say that this proved a decisive advantage. Going back into the 1970s, KKR couldn't rapidly stalk several companies at once in order to make acquisitions because its financial spreadsheets, which were on paper, not the electronic spreadsheets, required weeks of calculations by hand if you just wanted to change a few assumptions. Now you had these software, these microchips enabling giant companies, finances could be picked apart in an afternoon. So what happened is buyout firms began investing heavily in computing technology, upgrading hardware, and shifting to more sophisticated software so that they could be empowered. And what you saw was upstart firms having the ability in the financial world to challenge the big giant financial institutions. So what could be done now in the change or the click of a few assumptions within a spreadsheet? That was considered revolutionary modern technology. Now, if we go to the world of uh 2026, we're talking about artificial intelligence, and you hear lots of companies talking about their suddenly uh new ability to be able to do all sorts of uh current uh financial mechanisms that previously require teams of analysts that they can now do with a much smaller team. If we go back to the 1980s and we compare it to the 2020s, 40 years apart, we can see similar language, similar revolution. We will see if we see similar disruption, and we will see if we see similar disruption in the in the uh job market. In the job market, the disruption was very much a disruption that, hey, we need to bring in young younger people who can utilize and leverage this new technology. So while you didn't necessarily have a displacement of jobs, you had a displacement in the types of jobs being done. And we may or may not see that similar dynamic playing out today. I know there's lots of fears about uh jobs being displaced, not necessarily replaced. But we see uh today a five-person hedge fund called uh Palor Palinuro Capital, which was launched last year. They seek to compete with desks of 20 to 50 people by using artificial intelligence. They are going to use large language models to parse speeches by central bankers from Hungary to South Korea. That would have required dozens of analysts with regional language expertise previously. Now you can have the artificial intelligence listen and parse these uh speeches and give you summaries, seek out uh changes in tone, voice inflection. So we will see whether or not this capability just proves to make us more efficient, more productive, or if it seeks to, at the same time as making us more proficient and productive, make us need to have less people doing the job. The future will certainly be interesting as we learn what is going to uh happen as we see it unfold before

Market Moves And Week Ahead Calendar

Keith Lanton 18:52

our eyes. All right, this morning I mentioned uh futures uh higher as uh we come into this abbreviated session as tech stocks advance on the heels of last week's uh volatile uh financial markets. Uh last week the SP 500 lost 2% as uh many of the market's largest components struggled against the backdrop of uh semiconductor weakness. Uh interesting, last week the SP 500 equally weighted index, so each stock being weighted the same 0.2%. That was up 1.6% as investors rotated into the more value-oriented sectors of the financial market. This morning we've got uh some news here on several different stocks. Number one is Comcast. They plan on spinning off the NBC Universal from the cable business that they have, and Comcast Stocks, the MCSA, which has been a very poor performer year to date, yielding almost 6% from a dividend yield perspective. That stock uh on this news is up about uh 25%. A competitor to Comcast Charter Communications, also in the business of providing broadband fiber and uh cable services, that stock is up almost 20% as well, as uh they have uh disclosed that they have had discussions about a mobile phone partnership with SpaceX, and that stock is uh trading higher by about 26 points. SpaceX, due to uh perhaps uh some component of this news, as well as uh the fact that the NASDAQ 100 is fast tracking uh SpaceX into the index is up this morning about uh four points or two and a half uh percent this morning. Also, we have Alphabet in the news or Google announcing that they are placing uh limits on MetaPlatform's use of Gemini's AI models. Apple in the news this morning. Story that Apple wants to purchase memory chips from a Chinese company, CXMT, that uh according to the Financial Times. So this is further indication that Apple, if they're taking a step of reaching out to a Chinese company, is uh struggling to get the memory for their devices, and that is certainly uh something that Wall Street will pay attention to. We have a merger in the uh in the satellite uh business, space business. Uh Rocket Labs is acquiring Iridium, which puts uh satellites into uh orbit. Iridium stock is up about 20%, Rocket Labs up about 10% on this announcement. Other news this morning, let's uh step back to the Middle East. Uh Iran uh over the weekend launched ballistic missiles and drones at eight infrastructure targets at U.S. military bases in Kuwait and Bahrain. The U.S. also launched additional uh general attacks against targets in Iran. The US and Iran have agreed to stop attacking each other and meet on Tuesday in Qatar to work out their dispute over the Strait of Hormuz. President Trump reiterating that uh this morning. Wall Street Journal reiterating that Iran is continuing to claim it has the exclusive right to manage traffic in the Strait of Hormuz. Uh this week the Supreme Court will announce several key decisions. Fed independence is uh one of them that is expected to uh be uh on the uh docket, as well as some cases having to do with elections and possibly the case on whether or not uh people born in the United States are entitled to citizenship. Wall Street Journal reporting that Chinese artificial intelligence systems match the performance of anthropic mythos in some cybersecurity scenarios. Mythos is the uh most advanced of the uh anthropic LLM models that uh they have uh come out with to the public. New Fed Chairman Walsh will speak at the European Central Bank Forum in Portugal on Wednesday. The Wall Street Journal is reporting that four million Americans have dropped the Affordable Care Act plans uh as a result of the higher premiums uh that uh went into uh effect. So less Americans perhaps than before with health coverage. This week, tomorrow, Nike reporting fourth quarter fiscal 2026 earnings, looking for 13 cents a share. Shares of the sneaker maker are down 36% this year. And if uh you bought Nike stock in 2014, held it to today, well, you're about even outside of any dividends that you received. Wednesday, the Institute for Supply Management releases its purchasing managers index for June, looking for that to come in at 53.8. Anything above 50 is expansionary, and that number has been above 50 every month of this year, indicating growth in the manufacturing sector. In the previous three years, there are only two monthly readings at or above 50. So you can see that some of the uh policies perhaps that have been put in place are having an impact on the manufacturing sector here in the United States, and certainly the uh build out of the large data centers, another factor they're uh influencing the manufacturing here in the U.S. Thursday, the Bureau of Labor Statistics releases the jobs report for June, forecast of 113,000 increase in non-farm payrolls, unemployment rate expected to stay unchanged to 4.3%. So this will certainly get uh lots of attention. That report coming out on Thursday because Friday stock and bond markets are closed in observance of Independence Day. One source of concern that uh some uh market strategists are suggesting to keep an eye on is the record volume of margin debt. Margin debt uh in May up uh 8.5% to 1.4 trillion, so month over month up 8.5%, and margin debt is up 53% year over year. So some suggesting that some of the runup may be due to increased leverage, which makes some concerned that if things were to turn downward, they may turn down quicker than traditionally is the case because of uh the leverage that has been built up uh into uh the financial markets and the system. I mentioned last week that uh we had the equally weighted SP up, even as the SP itself was down 1.8%. Uh the Dow last week was up one percent. Uh the Magnificent 7 were down on average about 6%. Worst show year to date, and last week the NASDAQ uh was off uh 4%. One of the catalysts for uh some of the weakness in the Nasdaq was uh the word from Apple that uh they would be uh raising their prices on their devices as their memory costs have dramatically increased.

Drone Warfare And Defense Stock Ideas

Keith Lanton 25:58

So we talked uh about what's taking place in the Middle East, uh, what's taking place in the Straits of Hormuz, and one of the big factors uh perhaps uh influencing what's taken place in the Middle East is the same factor that's taken place in Ukraine, and that is the proliferation of drones, and they are upending warfare, upending the defense sector. Barons uh had a headline talking about uh four battle-tested stocks that uh they say could lead the charge in uh drone technology. If we back up, American military dominance was built on a simple rule. This is the lead story in Barron's spend the most money on the biggest, most complex weapons, $150 million on an F-22 fighter jet, four million on a Patriot missile, $13 billion on a nuclear-powered aircraft, and it seems so far year to date, if you have the biggest chip paycheck and the biggest checkbook, you had the best chance of uh winning the war. Uh, but some are saying that uh that era is waning or perhaps uh nearing its end. Conflicts in Ukraine and Iran have exposed a flaw in our legacy military strategy. It turns out that this multi-billion dollar firepower can be held at bay by a weapon that costs less than a used uh car, and that is the inexpensive drone. If you think about it, in Ukraine, homegrown drones costing as little as $10,000 have uh wiped out thousands of advanced Russian tanks, and in the conflict with Iran, the regime's decentralized low-cost Shahed drones successfully shut down the Strait of Hormuz, the world's most important uh oil checkpoint. The U.S. and Israel were forced to fire off millions of dollars in advanced interceptor missiles to swat down $5,000 quad helicopters. So what we are seeing is an asymmetric economic problem. The Pentagon knows it has to pivot, and in order to catch up, the U.S. Defense Autonomous Warfare Group, also known as DOG, DAWG, is seeing its budget explode from $225 million this year to $55 billion. $225 million to $55 billion in 2027. Wall Street analysts estimate that annual market for these low-cost autonomous weapons could easily hit $100 billion. So this pivot is sparking a modern-day gold rush for defense investors, creating a battle between nimble tech startups and traditional defense companies. So for newly public and uh veteran companies that uh Baron's uh suggests uh taking a look at, uh not necessarily suggesting you invest in, but doing some homework. One is Swarmer, symbol Sam Whiskey Mary Roger. This is backed by Blackwater founder Eric Prince. Swarmer doesn't actually focus on hardware, they build AI-based command and control software that links drones together. So this allows a single human operator to command a fleet or a swarm of drones. Their tech has already been deployed hundreds of thousands of times in live missions in Ukraine. Another is Avex Corp, symbol AVEX. They went public in April, and they are known for the Phoenix Ghost, which is a kamikaze drone capable of silently staying in one space in the air for up to six hours while it waits for its target to appear. Half of their 2026 sales went to Ukraine, and they are rapidly transitioning into a significant supplier for Western militaries. Next up is Redcat Holdings, symbol RCAT RCAT. Redcat specializes in reconnaissance and first-person view attack drones that are specifically hardened to work in environments where the enemy is actively jamming signals. They produce the Variant 7 Maritime Drone, a system heavily monitored on successful Ukrainian naval tech, making them a prime beneficiary of the U.S. ban on Chinese-made drones. And finally, there is Aerovironment, trading under the ticker symbol AVAV. They were one of the very first American contractors to bring hardware to the front lines of Ukraine, famously supplying the tank busting switchblade loitering munitions. What made AeroVirement incredibly unique right now is its dual focus. They are building an anti-drone technology. Their locust directed energy lasers have been deployed in the Iran conflict to literally burn through the hulls of incoming enemy drones. So you you know to the Star Wars talks about the drone wars. Uh Star Wars has technology where we see uh lasers being fired uh on the screen, and we are getting closer and closer to that uh as you can uh hear as uh technology continues to evolve. Now, this doesn't mean that the old guard like Lockheed, Martin, and North Garmin, are dead. While their stocks took a hit during the recent Iran conflict, they are pivoting into tech incubators. Lockheed, for example, just expanded its corporate venture fund to a massive one billion dollars explicitly to buy up and seed innovative drones. Bottom line is these drone wars are just beginning. We will see a tension here between the startups and the entrenched legacy defense companies with their big budgets but less nimble, as opposed to the startups which are a lot more nimble but don't have the capital cushion that the uh big companies have. So we will see on who is able to build the smartest and most cost-effective new military technologies.

Micron And The New Memory Cycle

Keith Lanton 31:50

I mentioned uh Micron Technologies, uh MU. This is a chip stock which has uh gone on a uh wild ride to the upside with an occasional uh pullback. Uh you might think this is the type of company that uh somebody like Barron's, which is typically uh pretty conservative, would suggest uh shying away from. But Barron's uh suggesting that there is uh more in the tank for Micron, even suggesting that the stock has the potential, certainly not a promise, but to uh to still see uh another double from here over the next uh year or two. The thesis here is that uh historically memory chipmakers were a massive gamble. The industry was cyclical, causing the stock to trade at a massive discount. Now Micron is leveraging a historic structural memory shortage into an effort to uh break the artificial intelligence uh boom and being able to uh use the uh artificial intelligence boom to break the uh cycle of boom and bust. So Micron had significantly cut back net production in 2024 as memory prices were declining, and that has set the stage for a lot less supply here in 2026 as demand uh is exploding. So Micron, now that they are uh once again leveraging up their capacity, is uh thinking strategically on how they will uh eliminate future bus cycles. And what they are doing is they are forcing customers into three to five year take or play supply contracts that include high price floors and upfront cash deposits. And these contracts already cover 40% of their revenue. And the price floors on these new contracts are set well above Micron's peak quarterly margins from any past cycle. So what this does is it uh guarantees profitability and and and immense profitability, according to Barron's through 2030, even if the broader market downturn were to occur. Wall Street is valuing Micron at just nine times forward earnings, and that's uh due to its cyclical reputation. Barron's saying if investors realize these long-term contracts uh have smoothed out the valuation, then they may smooth out some of the volatility, and we may see a re-rating in the stocks, and that's how Barron's is coming up with their thesis that uh you have the potential for a doubling in the share price. Analysts are scrambling to adjust their models as they gain more information about Micron's strategy. Following Micron's last call, 35 of 42 analysts drastically raised their forecast, pushing next year's earnings per share estimate up to get this $144 a share. And that's up from a month ago when they were at $101 per

Alphabet Pullback And AI Competition

Keith Lanton 34:40

share. Another company that has been in the news, this one had a big run-up and has pulled back and uh is uh right now a company that some are questioning is Alphabet, also known uh somewhat as uh Google. Alphabet has uh recently uh been invited to uh join the prestigious Dow Jones Industrial Average, replacing Verizon. But if shareholders are expecting a victory lap, they got a reality check instead. The stock slipped after the announcement. Historically, though, joining the Dow doesn't give companies a major boost. The truth is that uh Google's parent has a lot of fish to fry. Stock is down 15% from its May highs, driving the anxiety is a high-profile AI brain drain, top talent jumping ship to rivals like Anthropic and OpenAI. In addition, aggressive price cutting from Chinese AI firms is threatening to squeeze profit margins across the industry. But Baron says you might want to think twice before you panic. Look at the underlying fundamentals. Their cloud computing business surged an incredible 63% in the first quarter, core search traffic hitting an all-time high, YouTube market share all-time high, and app and alphabet's uh Gemini AI chips are proving to be a genuine competitor to NVIDIA. So they say with Alphabet stock trading at under 24 times forward earnings on a PE basis, they are suggesting the stock is starting to look like a bargain. It may be out of favor now, but this dip could be a good entry point for in vet patient investors waiting on a comeback.

High Yield Income Picks For 2026

Keith Lanton 36:17

All right, finally, talk a little bit about income for those uh folks who are looking to uh increase their cash flow. Barron's uh talked about the best high-yield income investments for 2026 coming into the year. Uh Barron's favored stocks. At the midpoint, Barron's still favoring stocks, although a little bit more optimistic about the traditional bonds as well. Saying a good case can be made for bonds uh after a mediocre first half where key bond indexes returned anywhere between 0 and 3%, talking about the fact that treasuries are yielding somewhere between 4 and 5%, uh the real short treasuries and the high three is almost 4. Corporate bonds yielding 5 to 6%, mortgage securities 5.5%, high yield or junk bonds 7% or more. Baron's suggesting that the uh yield premiums on non-treasury debt are historically low or lackluster, but the all-in yields, meaning the actual returns that you're getting are still good. When talking about uh dividend stocks, uh which uh Barons still has a sweet spot in their hearts for, uh they suggest taking a look at the Vanguard High Yield ETF. The symbol is uh Victor Yankee Mary. It's up about 11% year to date, yielding 2.3%. For those more value-oriented, one we talked about last week is the ProShares S P 500 dividend aristocrats. The symbol is NOBL. It's up 7.5% year to date. These are companies that uh have raised their dividends for the past 25 straight years, and that's yielding 2.3%. Baron's also, for those who are looking for a little bit more yield, willing to take on some more risk, speaking favorably about uh the telecommunication stocks which are facing competition and perhaps uh some co-opetition, as we heard today, with respect to Charter and Starlink, but competition threats from Starlink for traditional uh wireless weighing on companies like AT ⁇ T and Verizon. Barron's uh suggesting that some of the worst news may be in these stocks, and then today uh one of the companies mentioned in this article, Comcast, uh, getting news of a breakup and uh seeing some appreciation. With respect to municipal bonds, uh Barron suggesting that intermediate municipal bonds not particularly attractive with uh yields for 10-year munis in the uh double to triple A category uh sub 3% versus getting almost 4.4% in treasuries. So the after-tax yield relative to treasuries not particularly compelling. So Barron suggesting in the Muni world, taking a look at uh some of the shorter bonds and uh taking a look at the longer bonds, the longer-term munis uh yielding closer to uh the treasury yields, uh, where you're able to uh see yields in the 430 to 450 range for uh long-term uh municipal bonds. Finally, one other sector uh Barron suggests uh giving a look to in the uh income space would be the mortgage-backed securities, which has been underappreciated by investors. Barron's saying that the strong credit quality from mortgage-backed securities, um, many of them backed by Fannie Mae and Freddie Mac, quasi-government entities, so carrying little credit risk, recent yields in about the 5.25 to 5.5% range, which are yields that are in line, if not better, than some higher credit quality, uh high credit quality uh investment grade bonds. Uh one of the reasons they suggest taking a look at mortgage backs is that uh mortgage backs are not seeing a big new supply like you're seeing in treasury securities, so you will not get that supply pressure in mortgage backs, and you are getting that uh extra yield, so you're getting uh paid for the mortgage back, cash flow inconsistency, and you are in a moment where you're not seeing a lot of supply, so the risk award looking relatively attractive for those who are willing to uh dabble in the non-agency mortgage mark back market, so that's uh non-fanny and Freddie back paper. They suggest taking a look at the fund run by Jeffrey Gunlock, the double line total return bond fund, uh, which is yielding close to six percent. The symbol there is DLTNX. Delta Lucky Tom Nancy X-ray.

Keith Lanton 40:42

That's everything I've got.

Alan Eppers 40:43

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Sophie Cohen 41:01

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