VIDEO: OpenAI's Spending Message Boosts These Portfolio Plays

In today’s Portfolio video, Chris Versace lays out what the Portfolio will be focusing on this week and why company comments this week at the Goldman Sachs Communacopia & Technology Conference could determine the market’s next move.

Chris also shares our expectations for Apple’s APPL hardware event this week, the role of Taiwan Semi’s TSM August revenue report and how big spending comments from OpenAI reaffirm our stance on multiple Portfolio holdings. 

He also shares our game for Dutch Bros BROS shares and key technical support levels, as well as how August CPI and PPI results could shape Fed rate cut expectations.

Transcript

CHRIS VERSACE: Hey, everybody, Chris Versace here. Monday, September 8-- a week with the big investor conference, Apple's latest hardware event, August inflation data and no Fed heads making the rounds ahead of the Fed's September 17 policy decision. Now, coming into the week, and it's going to be a big one as you can tell, OpenAI has reportedly told investors it will spend $115 billion through 2029. That's roughly $80 billion more than some had expected.

And for some context, OpenAI is expected to spend around $8 billion this year, $1 and 1/2 billion more than previously expected. And I mention this because it really sets the tone for what we could hear this week at the high-profile Goldman Sachs Communacopia and Technology Conference.

Now, in Friday's roundup, we noted we have several portfolio companies presenting at the event-- Microsoft, NVIDIA, Axon and a bunch of others. And our plan is pretty much the same as what we've done over the last few weeks. We're going to collect fresh comments about the current quarter, that's being mindful of what's said about demand, inflation and tariff pressures on margins. But also, as we talked about last week, the dollar.

We'll also be really focusing on comments about earnings expectations for not only the current quarter, the final quarter of the year as well, and any preliminary color on 2026. And I say this because, remember, that despite Friday's little setback with the S&P 500, it closed last week at more than 24 times consensus 2025 EPS expectations.

So what this tells us is that over the next couple of days, as the Goldman conference and others happen, because there are other conferences happening, there's going to be a growing emphasis on earnings expectations being confirmed, if not lifted in all of these management presentations. And remember, we're barreling towards the end of the current quarter. So the management teams have a relatively good feel for how the quarter is shaping up. Hence, our and the markets leaning into what is said about earnings expectations.

Now, I'll also say that when it comes to OpenAI spending or even comments made last week from Mark Zuckerberg that Meta is going to spend $600 billion over the next few years, I have to say that we are following the money with multiple positions in the portfolio. And that has this kind of feeling good with the selections that we have. But let's get back to this week.

We do have Apple's event. Got to be honest, kind of seems like a meh event. More iterations of existing products for the most part. We'll have to watch pricing comments.

The thing that we will be looking for that could be a positive surprise is any update on Apple Intelligence and any big update or resetting of expectations for the AI-enabled Siri that isn't expected to appear until sometime next year. This could be in the form of a partnership arrangement with a company that might help Apple get over the AI hump.

It could be Google. There are some reports out there, kind of speaking to that. And our view, as we talked about last week, the ruling that helped Google shares pop, that really does clear the way for a potential relationship with Apple and Google on that front as well. So we'll be listening for that.

This week, we also will be paying attention to see if we get August revenue results from Taiwan Semiconductor. That's a great indication for the seasonal ramp in a number of products. But it'll also continue to show whether demand for AI and data center remains robust.

Remember, last week, known NVIDIA and Apple partner, Foxconn, had a nice August revenue report, up about 10% year over year, kind of reaffirming that seasonal ramp. So now we'll look for more with Taiwan Semiconductor as we continue, as I like to say, to follow the data.

Now, moving forward in the week, really coming off of last week's August employment report, yes, the door is open for a Fed cut next week. The larger question now is whether the Fed will deliver the three rate cuts the market expects, if you take a look at the CME Fedwatch tool, or two or one. And our view has been and continues to be that what we see in the August CPI and PPI data out this week will help kind of give us a better indication of what the Fed is likely to say and do next week.

And that includes any revisions to the updated outlook for economic projections. Remember, we get those four times a year. The next one is at the September meeting next week. In that, we'll be looking to see what does the Fed now think about the number of rate cuts for this year.

Remember at the June update, they were looking for two. But also, too, what are they looking now for the unemployment rate and GDP expectations? We'll put all that together as we get that next week.

But again, this week CPI, PPI. If they continue to chug higher, I think that could throw a little cold water on three rate cut expectations. Let's see what the data has to say. And we'll continue to course correct our thinking in the portfolio as needed.

And last week, I did say that with the likelihood of at least one rate cut coming, we are dusting off some more interest rate-sensitive plays. And we expect to have a little more on that this week.

Now, finally, when it comes to the portfolio, last week, I touched on it a second ago, but to put a little more color around it, shares of Alphabet, Google, were the big winner last week. And the drag on the portfolio was Dutch Bros. Now, when it came to Dutch Bros, there were no company-specific developments, no announcements, no news, no Wall Street comments either.

So that leads me to believe that the pressure on the shares last week was more the fallout of the August employment report. And we can understand that knee-jerk reaction given the figures. But remember, folks, the Dutch Bros story is tied to its expansion west to east, and the multiyear target that they have set.

And management has been very consistent in discussing that plan. And we've also seen a lot of data, that despite concerns about overall consumer spending, which so far has held up better than expected, granted, bifurcated. But folks continue to spend on these little guilty pleasures, like those that you find at Dutch Bros. So I will say that we continue to like the story.

And if you look at the shares from a technical perspective, there is a lot of support in the chart between 63 and 65. Shares closed on Friday just a little bit above that. Now, if we take a look at that intersection of the 50 day, the 100 day and the 200 day moving average, if the shares hold that support, again between 63, 65, over the coming days, that could be a good place to pick up the shares.

So, my friends, as you can see, we have another busy week ahead of us, but we also have a busy day as well. So that includes sharing a fresh technical look at the S&P 500 with you and the return of office hours this afternoon, as well as some other comments sandwiched in between.

So I'm going to ask you, once again, please be sure to check your emails, your alerts. We want to make sure you get our latest thoughts. And if we happen to make any moves with the portfolio, we want to make sure that you are right there with us. Thanks for watching.