VIDEO: Trump May Not Use Force for Greenland, But He Has Other Tools

In today’s Pro Portfolio video, Chris Versace shares his reaction to President Trump’s World Economic Forum address, explaining why the Portfolio is remaining on the sidelines near-term rather than risk being head faked.

While Trump ruled out using force to obtain Greenland, and that is giving the market its latest sigh of relief today, Chris points out that there are other tools, including tariffs, that could be utilized by the president to obtain Greenland.

Chris goes on to connect the dots between United Airlines (UAL) results and our position in American Express (AXP) and explains why a comment from Netflix (NFLX) about its 2026 advertising revenue strengthens a headwind for a former Portfolio holding.

We also discuss comments from Progress Software (PRGS) about AI and software being overblown, and what that means for our shares of ServiceNow (NOW) .

Chris ends today’s video chatting about our standalone Alert this morning on Palantir (PLTR) , and how its expanded relationship with HD Hyundai is a shining example of AI adoption in the enterprise.

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At the time of publication, TheStreet Pro Portfolio was long AXP, NOW and PLTR.

Transcript

CHRIS VERSACE: Hey, everyone Chris Versace. Wednesday, January 21. And we've just come off President Trump delivering his address at Davos. You can see the reaction in the market. Obviously, it's rebounding today. Maybe not as much as we saw the sell off yesterday.

But the catalyst here is what I would characterize as a sigh of relief from the market, with President Trump sharing that he is not going to use force in an effort to bring Greenland into the United States. He did say that he has a number of meetings today, tomorrow. He laid out his case really saying that only, in his view, the US can defend, protect, and support Greenland. He also talked about how the US has done quite a bit, in his own words, for NATO, and saying that the US is only asking for a little bit.

My take on it is I can understand Trump's case. Obviously, there are other views on this. My concern is that even though he won't use force, he still has other measures to which he can try, and let's just use the word finagle, Greenland as part of becoming part of the United States. He did emphatically state that ownership is key, not a lease, but ownership. So I suspect that there could be another shoe to drop in this. Maybe it's the step up in tariffs. Maybe something else. I don't know.

So for that reason, even though the market is moving higher today, we're going to proceed carefully. We don't want to get head faked. We don't want to get whipsawed. Use your expression. We want to have greater clarity on the Greenland situation before making any moves. That's just the way we're going to play it.

I will also say that during his address, Trump made some other comments, sharing that he is meeting with Putin and Zelenskyy. So maybe there might be some progress there. He also talked about inflation, which he said is rapidly coming down. I do think that that is not exactly what the data we're seeing shows on a year over year basis. We will continue to follow the data and position the portfolio accordingly.

With that in mind, we do have some data coming out later today, even though it remains rather rear view facing, including construction spending data. Later in the week, we will get some PCE price index data as well as the flash PMI report from S&P for the month of January. So we'll be talking about that later in the week.

But now I want to shift gears and just talk about some other developments and how they may tie back to the portfolio or some of the things that we've done in the past. First up, let's talk about United Airlines stock is moving higher. Company had a good quarter. They also shared that demand remains robust, and that they saw a double digit rebound in business travel bookings over the last two weeks.

Now, when we think about travel, we think about-- and especially business travel, we tend to think about our shares of American Express. Remember that as positive as these continued signs of spending are, the real secret sauce for American Express is the platinum card refresh, as well as other card refreshes. We did hear from Delta Airlines that they continue to see great inroads with their partnered card with American Express.

And the platinum card, of course, as I've talked about, is the key with its biggest refresh offering ever. This is why when American Express reports next week, we will continue to focus on what the data says about average fee per card and the number of cards in force. Those are the two big levers that combined drive about 70% plus of Amex's pre-tax income. So that'll be a key focal point for us.

I also want to talk a little bit about Netflix. Those shares are under pressure today. Company's guidance was a little softer than expected. They also suspended their share repurchase program because of the all cash offer that they made for Warner Brothers Discovery. Company also commented that it is going to continue to spend on content.

Now, on the one hand, I would argue that spending on content is key for Netflix, because as we know, quality, excuse me, content is what attracts subscribers. So I do think that that's a positive for them. Ultimately, we will want to see how do they integrate Warner Brothers Discovery, what are the synergies, what are the cost reductions, that sort of thing.

I will say that while we have been tempted in the past to look at Netflix, we even had them in the bullpen, if we look back at the double digit, that's an understatement, drop in Netflix shares, it has paid to avoid the shares and stay on the sidelines. However, could there come a day when we first put Netflix shares back in the bullpen? I think there is.

I think it's going to hinge on our understanding how Netflix's streaming culture can come together with the content creation and distribution engine that is Warner Brothers Discovery. We have seen large acquisitions, arguably mergers, come together and they don't always work out. Time Warner AOL is a great example. So we'll want to see, again, what Netflix's plans are for this, and we'll reevaluate as time goes on.

But I would also share this comment that stood out to me during Netflix's earnings call, and it's that the management team expects the advertising revenue to double in 2026 compared to 2025. Now, on the one hand, this could be a little bit of a trade down from full price subscription programs. Understandable.

But at the same time, if we think this through, and we also say Amazon and Prime and Prime Video are continuing to grow and attack advertising. Apple is doing the same. Meta is also expanding its advertising reach, not just inside of Facebook and Instagram, but to Threads, into WhatsApp as well.

This tells us that the outlook, in my opinion, for the Trade Desk, a position we exited some time ago and I'm only bringing it up because we've had folks ask us, we didn't exit Trade Desk when the portfolio did. What should we do? And I'm just going to share that I see a growing strength in the number of headwinds for Trade Desk. I'll leave it at that.

I also want to talk a little bit about Progress Software. This is a company that had been in the initial basket for EPS diplomats. We rotated out of it. But they reported last night and their guidance for the current quarter was above consensus expectations. And their guidance for 2026. Bottom line results also stronger than expected. The CEO, Yogesh Gupta, said that the company's revenue is being driven by customer AI projects. This tells us that enterprise adoption and AI usage is expanding. That's a positive thing. But he also said, and this is really what I wanted to talk about here, is that there's an overblown fear of disruption in the software space by AI.

Now, why do I bring this up? Well, there have been a lot of folks that have been Debbie Downers, Negative Nancys, call it what you will. And that has pressured shares of Microsoft, really pressured shares of ServiceNow. So much so that they reached extremely overbought levels-- sorry, oversold levels last week, oversold. And we stepped into the shares. They continued to trend lower.

But as I pointed out, when we looked at that degree of an oversold condition as well as the level of short interest on the shares, it doesn't take much for some positive news to cause some short covering, and that can help start fueling a rebound, a turn in the shares. And I think that Yogesh's comments support that.

I also think that when ServiceNow reports next week, we should see a lot more or get a lot more insight on their recent acquisitions, as well as the announcement last night that they've expanded their relationship with OpenAI to include OpenAI's AI agents and models in ServiceNow offering. To me, I think that's actually a very nice thing, kind of similar to Apple leveraging Gemini to deliver a refurbished AI enabled Siri.

I think that ServiceNow leveraging OpenAI's models, yeah, it helps OpenAI get into the enterprise a little more, and I'm sure there's a revenue stream attached to that. But from ServiceNow, they don't have to build their own AI model. So I'm very interested to hear not only what is ServiceNow planning on the cybersecurity front, but how they are planning to leverage OpenAI to help accelerate the AI adoption of their customers?

And remember, one of the biggest headaches for the enterprise adoption of AI has been the siloization of data. And I continue to think that ServiceNow, given how it addresses multiple workplaces inside the enterprise, can really help them overcome it. I suspect that OpenAI might be another way to help ServiceNow accelerate AI adoption in the enterprise. We'll hear more about that next week.

And one last comment that I want to make is just on Palantir. We had a note out this morning, just on the topic of AI as a transition from ServiceNow, is that that expansion of Palantir into the full complement of HD Hyundai businesses really talks about how companies will start off small with AI and expand as they continue to see the benefits.

I think the big benefit, and I shared this in the note, was from HD Hyundai saying that they saw a 30% improvement in shipbuilding. That is tangible results. And to the extent we start to see more of that, I think that bodes well for Palantir winning other commercial enterprise business, which of course, is a very nice thing for the company.

And as I called out in that note, we will, upon getting some confirmation of certain details on that win with HD Hyundai, we may need to revisit our Palantir price target. But check the levels, and we share where we would be-- while we have a one rating on Palantir in the alert, we talk about where we would get aggressive in terms of buying Palantir shares given the current size of Palantir position in the portfolio.

And with that, my friends, that is today's video. I will be on talking stocks, excuse me, live at the New York Stock Exchange right after the closing bell today. And I will be on with the Schwab network bright and early tomorrow around 8:30. But we'll share those videos with you as we get them, of course. Stay tuned. We've got a lot more coming your way.