Our top 10 things to watch Friday, Sept. 25 — Club editors Matthew J. Belvedere and Kevin Stankiewicz wrote today's newsletter.
1. Stocks are heading for a higher open, with the S & P 500 and Nasdaq poised to post winning weeks. Oil prices are down this morning, but bond yields are still up. The recent surge in the 10-year Treasury yield has kicked up the rate on 30-year mortgages to 7.45%, the highest level since 2024.
2. This morning's oil retreat is due to optimism about an Iran offer to reopen the Strait of Hormuz and resume nuclear talks with the U.S. within seven days if Washington accepts its conditions. There were reports yesterday of some movement on the diplomatic front after President Donald Trump and Iranian President Masoud Pezeshkian earlier this week exchanged threats in fiery speeches at the United Nations.
3. Trump talked to Chinese President Xi Jinping at the White House yesterday. The Iran war was on the agenda, and so was artificial intelligence. No details were released. Last night, the president threw a state dinner for Xi, with a who's who of AI billionaires in attendance. Today, Xi is set to conclude his Washington visit at the National Archives, where the Declaration of Independence, the Constitution, and the Bill of Rights are stored.
4. Anthropic's hunt for compute continues apace. The Claude chatbot creator and Akamai Technologies announced a seven-year, $11.6 billion commitment, expanding an earlier partnership. Akamai shares are soaring almost 20% this morning. A notable detail: the new deal "will support Anthropic's accelerating CPU workload demands." The agentic AI-driven CPU renaissance is why we own Intel.
5. The CPU boom is also a windfall for Advanced Micro Devices, which had its price target at Bank of America raised to $720 from $620. The new target implies a 14% upside for a stock that's already nearly tripled this year and entered the $1 trillion market-cap club this week. CEO Lisa Su inherited a company on the precipice of bankruptcy in 2014, and now it's here.
6. How's the memory-chip side of the AI trade doing? Micron will help answer that question next week when it reports earnings. Shares are up 16% since we added to our Micron position during the Sept. 14 sell-off sparked by the Anthropic CEO's AI safety manifesto. BMO Capital Markets increased its Micron estimates ahead of the quarter and argued that memory "remains in a supercycle," with demand outstripping supply through calendar 2027.
7. Deutsche Bank raised its price target on Club name Meta Platforms to $820 from $750 and kept its buy rating. The analysts called the social media giant's wildly popular Muse AI personal agent "virtually unique," noting the launch earlier this month is "far ahead" of other AI app introductions. We see Muse as a winning AI strategy.
8. Costco reported a better-than-expected fourth quarter last night, but the numbers were not strong enough to silence the debate over membership trends and the retailer's growth outlook. We're OK holding the stock for now, but we lowered our Club price target. There was a mix of analyst PT cuts and hikes.
9. Top banking analyst Mike Mayo of Wells Fargo is out with his third-quarter earnings preview, with mixed attitudes on Club names BNY and Goldman Sachs. "Goliath is still winning," Mayo wrote, but he expects trust banks like BNY to have outperformed pure-play bets on capital markets activity such as Goldman in Q3. He upped estimates for BNY and lowered them for Goldman. Kept a hold rating on BNY and a buy on Goldman, though.
10. Bank of America downgraded Nike to a sell from neutral and lowered its price target to $30 from $47. The analysts are worried about an earnings miss. BofA also cut its estimates for Nike's earnings and sales. We exited Nike back in July after a weak quarter. It was a hard pill to swallow but necessary because CEO Elliott Hill's turnaround is taking much longer than anyone thought.
