At In be stock, we believe the only place to be is In Best Stocks. Welcome to today’s briefing.
■ Macro & Geopolitics: A Massive Boost for Defense
Defense Stocks (NOC, LMT, RTX, KTOS, GD)
$1.5 Trillion Budget: President Trump announced via Truth Social that the 2027 military budget has been set at $1.5 trillion, significantly higher than the initially discussed $1 trillion.
Strategic Vision: Trump emphasized building a "Dream Army" to ensure national security, claiming that increased tariff revenues will fund this expansion while reducing national debt. Major contractors like Lockheed Martin and Northrop Grumman are expected to be primary beneficiaries.
■ AI & Big Tech Leadership
Alphabet (GOOGL)
Upgrade: Cantor Fitzgerald upgraded Alphabet to Overweight and raised the price target to $370.
Gemini's Edge: Analysts believe the Gemini Assistant, integrated with Google's grounding assets, is undervalued compared to ChatGPT/Bing. Alphabet is cited as having the strongest position across multiple AI layers due to a decade of infrastructure investment.
Reddit (RDDT)
Data Value: Cantor Fitzgerald initiated coverage with a Neutral rating and a $240 target.
AI Corpus: While valuation remains high (25x EV/EBITDA), Reddit’s 120M daily active users and high-value content corpus make it a prime target for AI developers seeking high-quality training data.
■ CES 2026 Highlights: Robotics & Physical AI
Serve Robotics (SERV)
Nvidia Catalyst: CEO Jensen Huang gave a direct shout-out to Serve Robotics' delivery robots during his CES keynote. Analysts at Northland Capital Market set a $26 target, noting the high ROI of Serve’s virtual driver technology in public spaces.
Arm (ARM)
New Division: Arm announced the creation of its "Physical AI" division at CES 2026. This aligns with the industry-wide shift toward integrating AI into autonomous vehicles and humanoid robots. Arm now operates on three pillars: Cloud/AI, Edge (PC/Mobile), and Physical AI.
Ford (F)
L3 Ambition: Ford announced a goal to launch an affordable Level 3 autonomous electric truck by 2028, priced around $30,000. The company plans to integrate AI services into Ford and Lincoln apps starting this year.
■ Semiconductors & Cloud Infrastructure
SanDisk (SNDK)
NAND Shortage: Mizuho predicts a severe NAND supply shortage in 2026-2027 as AI infrastructure demand (+20-25%) outpaces supply growth (+15-18%). SanDisk is expanding enterprise SSD contracts with major hyperscalers.
Intel (INTC)
Panther Lake Ramp-up: Intel is expected to increase Panther Lake production by 70% in Q1 2026. While this may temporarily pressure gross margins, it signals a shift in focus towards yield optimization and advanced packaging for ASIC and GPU businesses.
Infosys (INFY) & AWS
GenAI Collaboration: Announced a strategic partnership with AWS to expand enterprise GenAI adoption, combining Infosys Topaz with Amazon Q Developer to enhance operational efficiency for global clients.
■ Energy & Mobility
Exxon Mobil (XOM)
Earnings Hit: Management warned that lower oil and gas prices in Q4 2025 will impact upstream profits by up to $1.2 billion. However, they maintained a long-term goal of increasing net income by $5 billion by 2030 through efficiency gains without additional Capex.
Uber Technologies (UBER)
Buy the Dip: Jefferies maintained a Buy ($120 PT), emphasizing that Uber's strategy of partnering with over 20 autonomous tech firms (including Waymo and Avride) creates a robust defensive moat against competition.
■ GitLab (GTLB)
Downgrade: Cantor Fitzgerald lowered its rating from Overweight to Neutral and slashed the price target from $60 to $40.
Competitive Pressure: Analysts noted that the continuous enhancement of AI features and regulatory compliance by Microsoft (GitHub) and Atlassian (TEAM) is eroding GitLab’s competitive edge in enterprise environments, self-hosting, and data residency.
Weak Demand: Demand from SMEs and the public sector remains sluggish. New net customer additions for F3Q26 reached only 137, a 33% decline year-over-year.
AI Impact: KeyBanc also recently downgraded the stock to Sector Weight, citing concerns that AI-driven code generation may limit the growth of developer headcount—a critical factor for seat-based pricing models.
■ Applied Digital (APLD)
Earnings Beat: For FY26 Q2, revenue reached $126.6 million, significantly exceeding the market expectation of $88 million.
Bottom Line Improvement: EPS came in at $0.00, better than the projected $0.12 loss, raising hopes for a shift to profitability. The company confirmed it is in deep negotiations with another investment-grade hyperscaler across multiple regions.
■ Gap (GAP)
Upgrade: UBS upgraded Gap from Neutral to Buy, predicting a major inflection point for revenue and profit growth.
Growth Catalysts: Strategic expansion into beauty and handbags, along with accelerating sales for the Athleta brand, are expected to drive future performance.
■ Alcoa (AA)
Downgrade: JP Morgan lowered its rating from Neutral to Underweight, citing tariff-related uncertainties and a stretched valuation. The stock had recently neared a 52-week high, raising concerns over overheating.
■ Generac (GNRC)
Upgrade: Citi upgraded the stock to Buy, analyzing that the 20% decline since late October was an overreaction and creates an attractive entry point.
■ Constellation Brands (STZ)
Earnings: Reported financial results that exceeded consensus estimates.
■ FTAI Aviation (FTAI)
Target Raised: Morgan Stanley maintained an Overweight rating and raised the price target from $200 to $266.
Strategic Recycling: Analysts highlighted a nascent but significant theme: repurposing retired jet engines as aeroderivative gas turbines for AI data center power. This strategy extends the life and value of the engines while meeting the surging energy needs of AI infrastructure.
■ Albemarle (ALB)
Upgrade: Baird upgraded the stock from Hold to Buy, raising the price target from $113 to $210.
Lithium Recovery: Driven by rising lithium prices and strong demand for stationary energy storage systems (ESS).
Earnings Outlook: FY26 EPS estimates were raised from a $0.44 loss to a $1.26 profit. While benchmark lithium prices dropped below $9,000/ton after peaking in 2022, they have recently rebounded to approximately $18,000/ton due to large-scale battery storage demand.
■ D-Wave Quantum (QBTS)
Acquisition: D-Wave Quantum acquired Quantum Circuits Inc. for $550 million ($300M in D-Wave stock and $250M in cash).
Technical Synergy: The deal, expected to close in April, follows D-Wave’s announcement of a breakthrough in hardware that controls massive numbers of qubits without sacrificing performance—a key hurdle for large-scale gate-model quantum processors.
■ Coinbase (COIN)
Upgrade: BofA Securities upgraded Coinbase from Hold to Buy ($340 target), reflecting confidence in its long-term growth story rather than short-term market volatility.
Internal Strength: Despite the stock being 40% below its July high due to a crypto market cooldown, BofA believes the company’s internal competitiveness is strengthening through rapid product launches.
Diversification: Coinbase is evolving into an "all-asset exchange." Plans revealed in December to offer stock and ETF trading, as well as prediction markets, signal a move beyond traditional crypto to capture a larger total addressable market (TAM).
■ Constellation Energy (CEG)
Strategic Bet: Constellation Energy built the largest power portfolio in the U.S. by acquiring Calpine for $30 billion.
Power Demand: This move is a direct bet on the surge in U.S. electricity demand driven by data centers, EVs, and manufacturing reshoring. The company now owns 55GW of capacity, including 21 nuclear reactors and over 50 gas-fired plants.
Performance: Its stock has surged more than 7-fold since 2022 due to the data center-led power boom.
■ AST SpaceMobile (ASTS)
Correction: Following a downgrade from Hold to Sell by Scotiabank, shares plunged 12% to close at $85.73.
Valuation Concerns: While Scotiabank acknowledged AST's impressive technology, they noted that the current valuation is a significant burden for investors.
■ Alphabet (GOOGL / GOOG)
Regulatory Decision Imminent: Alphabet’s $32 billion bid to acquire cybersecurity firm Wiz is nearing a decisive moment, with European Union (EU) regulators set to deliver a final verdict early next month. Investor attention is intensifying as the timeline for this mega-M&A deal, which could reshape the cloud security landscape, becomes clear.
EU Timeline: According to the European Commission’s website, EU antitrust regulators are scheduled to decide whether to approve the transaction by February 10. Benzinga reports that all outcomes remain on the table, including unconditional approval, conditional approval with required remedies, or the launch of a full-scale, in-depth investigation.
■ AbbVie (ABBV) & Revolution Medicines (RVMD)
M&A Rumors and Surge: Shares of AbbVie (ABBV) and Revolution Medicines (RVMD) surged 4.2% and 28.6%, respectively, on January 7, following market rumors that AbbVie was considering an acquisition of the oncology-focused biotech firm.
Denial of Rumors: However, the momentum cooled after both companies subsequently denied the M&A rumors, leading to a stabilization of stock prices.
■ Shell (SHEL)
Q4 Guidance Update: In its latest earnings guidance update for the fourth quarter, Shell (SHEL) highlighted ongoing weakness in its Chemicals and Products segment.
Trading Slump: The company also warned that performance in its Trading and Optimization division is expected to be "significantly lower" compared to the results seen in the third quarter.
