Here's What’s Driving 4 Positions to Outperform the Market Tuesday
Here's our take on Amazon's lean into grocery, Microsoft’s AI chip news, Meta-Corning, and Boeing’s record backlog.
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If you haven’t looked, even though we have an hour or so to go before the market closes for the day, stock volumes as well as those for the major market indexes are thinner almost across the board. Despite the morning news we shared with you earlier today, and United Parcel Service (UPS) planning another round of massive layoffs, arguably the market is waiting for quarterly results, guidance, and capex comments from Microsoft (MSFT) and Meta (META) after Wednesday’s market close. Based on recent data, we continue to think the Fed’s policy decision Wednesday afternoon will be a non-event, with Chair Powell once again trotting out “data dependent.”
Notwithstanding the low volume, we have a few individual stock positions that are nicely outperforming the market, while shares of Lumentum Holdings (LITE) and SiTime Corp. (SITM) are lifting our EPS Diplomats basket higher.
Microsoft Trots Out Maia: That's Good for Marvell
Yesterday, Microsoft announced the second generation of its in-house AI compute accelerator chips, dubbed the Maia 200. As we know, Microsoft does not develop its AI accelerators entirely in-house, and it is understood that its partner for the Maia platform is our own Marvell (MRVL) . Remember that back in early December, based on bookings in hand, Marvell CEO Matt Murphy reiterated guidance calling for the company’s custom AI silicon business to grow at least 20% year over year in 2026 and double the following year. This appears to be part of what Murphy was referring to, and we’ll be looking to hear what Microsoft says about Maia on its earnings call Wednesday night.
Before we move on, we’d remind you of the relationship between Microsoft and Arista Networks (ANET) , pointing out that the ramp in Maia would lessen Microsoft's reliance on Nvidia (NVDA) . We see that as a positive for Arista.
Meta and Corning: A Play on Ensured Capacity
Corning (GLW) shared that it inked a multi-year deal worth up to $6 billion to supply Meta with cabling, optical fiber, and connectivity solutions for data centers across the U.S. While this checks the domestic sourcing box for Meta, we also see it as a move to ensure it has sufficient materials for its AI and data-center buildout. In 2025, Meta significantly raised its capex spending levels to $70 billion-$75 billion, with indications for “notably larger” year-over-year growth this year.
We are hearing chatter that the 2026 capex figure could be around $100 billion, which would explain the deal with Corning. However, connecting those dots points to Arista Networks because Meta is a top-tier customer.
Amazon Makes a Grocery Move, and We’re Liking It
Amazon (AMZN) is accelerating its push into online grocery delivery and expanding its Whole Foods footprint. The company announced plans to expand its Same-Day Delivery service for fresh groceries to more communities in 2026, building on what it described as strong customer feedback. It also shared that it will open more than 100 new Whole Foods Market stores over the next few years while closing its Amazon Go and Amazon Fresh physical stores.
Thinking back on comments made last year by CEO Andy Jassy about his bullish outlook on the grocery business and second-half 2025 spending to expand same-day fresh food delivery to over 1,000 cities, we should not be surprised by today’s announcements. As you know from our position in Costco (COST) , we see grocery as a nice driver of repeat shopping visits, both in person and online, and foster a larger customer basket, especially as Amazon leans into personalized AI shopping recommendations.
Our thinking is that the lean into grocery should help Amazon take wallet share from the likes of Kroger (KR) , Target (TGT) , Albertsons (ACI) , and other grocery stores. It should also help reduce the seasonality of its online shopping business.
Boeing Stock Is Down, but Its Backlog Is Good for This Holding
We have another positive development for our position in Eaton (ETN) following the word that it would spin its Vehicle and eMobility business off to shareholders next year. We discussed that initiative yesterday, noting the new Eaton would be ~80%+ focused on electrification with the balance in Aerospace. That brings us to Boeing’s (BA) earnings Tuesday morning.
While Boeing’s shares are trading off, its backlog hit a record $682 billion, which includes over 6,100 commercial airplanes valued at ~$567.3 billion. We’ll be watching Boeing deliveries as a proxy for Eaton’s aerospace business, but that backlog level points to multiple years’ worth of production.
At the time of publication, TheStreet Pro Portfolio was long MSFT, META, LITE, SITM, MRVL, ANET, NVDA, AMZN, COST and ETN.
