00:00 Speaker A

Monday is for stocks of the day, and I want to serve up three names that have surprised me this year. Hat tip to the Yahoo Finance social team, uh, social media team for pointing out one of these names on Instagram this weekend. SanDisk. Shares of the memory chipmaker are up nearly 500% this year due to AI spurring higher prices for the company’s gear. I have two other surprises I want to call out, though. We are smack in the middle of an AI boom, yet Salesforce shares are down. Get this, 31% this year. That’s despite the company spending another year hyping its AI agents. And then there is Nike. Its shares are down 15% this year, even as well-regarded Nike veteran, Elliott Hill has been in the CEO job for more than a year. Interesting. Uh, let’s get some hot takes from the round table, Adam Koons, Nicole Inui and Brooke DiPalma. Brooke, I’m going to start with Nike here. I am surprised that the stock hasn’t gained more on Elliot Hill. I mean, I think he’s solved their inventory crisis issue, he’s driving some innovation, he’s cut expenses. like what else does he need to do?

01:08 Brooke DiPalma

Well, it seems like investors want him to do more. I think that is a bit of a waiting game see there when it comes to Nike. as investors really try to seek out the the fruit of this turnaround story that Elliot Hill now has been leading for the past year. The investors really want to see this company do well in a a full-priced environment. They we know that they’re doing less discounting. They’re also looking to return to wholesale retailers. I think at Dick sporting goods, also Foot Locker, which recently was acquired by Dick’s Sporting Goods. Those are partners that they lost in the past as they really focused on the D to see that direct to consumer model. And clearly investors are still waiting to hold on tight to see this really turn out and really turn around and it seems like they’re not convinced just yet on how exactly this will turn out when you have other competitors like Hoka and On doing well in this environment.

02:18 Speaker A

Adam, when you see a company like Salesforce, uh, the software titan talking about AI agents, trying to get involved in the AI narrative, yet its stock is down 30 plus percent year to date. Like what’s the read through there?

02:35 Adam Koons

Yeah, I mean this is the story across several different names. I mean, you can take Core Weave as another example that’s, you know, got the the AI label, yet is down significantly. And I think it just comes back to the the fact that, you know, not all AI players are going to be a winner here. And part of it is that, you know, what we’re looking for in the AI story, uh, is we’re treading carefully, but we’re looking for those companies where, you know, AI really enhances an already, you know, robust business model. And what I would say is, you know, even before this, the salesforce model itself was, you know, kind of fragile. And so trying to throw the AI mix into it, uh, really has caused some disruptions. You know, if you look at kind of the culture of the firm, it’s actually caused more disruptions with just the staff and the layoffs. And so there’s a lot of uncertainty and that can create this, you know, negative culture that can hurt the overall company. and I think that’s what you’re feeling right now.

03:40 Speaker A

And I should know December 3rd, Salesforce, uh out with earnings. Nicole, um, you know, I think when I mentioned Sandis at the top, I think it fit perfectly what you mentioned in your year ahead outlook, the broadening of the AI trade. You know, not many people would I think I don’t think a lot of people had Sand desk in Sand desk in their portfolio earlier in the year, but to your point, I mean, the AI CAPEX cycle is so strong, you have to look outside of the Mag 7.

04:18 Nicole Inui

Yeah, I mean, you know, you have the the hyperscalers gonna spend about, you know, half a trillion dollars next year. So you’re gonna see that trickle down into other sectors. You’re gonna see that trickle down into industrials, into utilities. Um, so, you know, and also within the the tech sector as well. So, you know, again, we’ve had a very concentrated rally year to date. So, again, very concentrated in in in Mag 7. We still think they’re important stocks to own. It’s an important cohort of stocks to own. But, you know, I think it’s time to take a little bit off the table and start broadening that that exposure into into other areas, especially because what I talked about earlier in terms of the earnings growth, you know, that Mag 7 earnings growth still looking very good, but it’s going to slow down and you’re going to see these other sectors that are really going to to pick up and report double digit, probably report double digit earnings growth as well going into to 2000 and and 26. So, you know, you’re looking at the enablers, you’re looking at the adopters. We think there’s more space to add within this AI theme opposed to just the the hyperscalers at this point.

05:32 Speaker A

Before I get to my question of the day, Adam, let me get back to you real quick. Do you have a favorite play on AI?

05:40 Adam Koons

It’s been Google, which is really boring to say, but it I I do really like, you know, kind of the Google Alphabet story. I think they’ve got enough cash to to do this. And like I said, it really is just piggy backing on a business model that was already a rocket ship. So I think that’s kind of still going to be our number one play going into 2026.