VIDEO: We’re Watching These Levels for Palantir and 2 Other Holdings

In today's Pro Portfolio Video, Chris Versace talks more on the ending of the government shutdown and why the fallout of recent Fed speaker comments is likely weighing on the market today. 

We also discuss why we could see a potential speed bump in federal government programs when companies report their December-quarter results, and how that may be affecting some of the Portfolio's holdings now. With that in mind, we share why we remain bullish on AI and AI adoption well into 2026, as well as support levels we’re eyeing for our shares of Palantir  (PLTR) , ServiceNow  (NOW) , and Marvell  (MRVL) . 

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

Transcript

CHRIS VERSACE: Hey, everyone. Chris Versace here. Thursday, November 13TH. And I hope you enjoyed this week's podcast that we shared with you yesterday regarding the new nuclear age. If you haven't checked it out, please be sure to do so. I think you'll find it ties back rather nicely to some of our thoughts about the energy pain point for why we have eaten in the portfolio, but also about the continued ramp in AI and data center capacity.

But again, that was out yesterday. Let's talk about today. If you saw our opening comments this morning, then you know that obviously, the government shutdown is over, but yet the market is trading off in response. The question is, could this be a bit of a buy the rumor, sell the news event, especially after the markets move higher over the last few days following what we would call as the weekend's anticipation and subsequent building for the shutdown to end.

Certainly possible. But I would also say I think that there's something else going on, and that really ties to the shifting expectations for a fed rate cut in December. Last week, the CME FedWatch tool showed a 70% chance for a December rate cut. You know, 25 basis points.

Today, that stands closer to 54%. So the question is, well, what happened? And yeah, some folks, you can blame it on the recent economic data that shows that the consumer continued to spend in the month of October. We touched on that in our American Express Alert that we shared with you earlier.

There's also the pickup in service sector activity we saw in ISM's October service PMI. But more likely, it was due to the comments from some of the fed heads yesterday. Susan Collins, the Boston Fed President, and yes, a voting member, yesterday said she was concerned about inflation, no surprise, given what we saw and shared with you in that October service PMI report.

Collins noted that it is above the Fed's 2% target. Not exactly new information. But when we look at the trend in the latest CPI report, and again, the more recent October service PMI report, the direction of inflation pressures is certainly moving in the wrong direction.

Also recently, Austan Goolsbee, Chicago Fed President and also a voting member, his comment was more about the data blackout. He said something along the lines of when it's foggy, let's just be a little careful and slow down. That kind of reiterates something Fed Chair Powell said after the last policy meeting.

But we have a lot more Fed speakers today. Again, just today alone. New York Fed President John Williams, Minneapolis Fed President Neel Kashkari, St. Louis Fed President Alberto Musallam, Cleveland Fed President Beth Hammack, and Atlanta Fed President Raphael Bostic toward the end of the day.

A lot of comments to come. Could we get some mixed messages along the way from this latest gaggle of Fed speakers? Certainly possible. The reality though, as I see it, is we have a few weeks to go until the Fed's next policy meeting and data to come. I know some folks are kind of like enough with follow the data, but that's what we have to do. We have to respond to the data and adjust our thinking if need be.

Not only are thinking about the outlook for Fed policy, the economy, but also, of course, end markets and the portfolio's position. So the data that we'll be looking at, well, next week, we will get the Flash November PMI from S&P Global. First kind of hard look at the month of November. And then right after Thanksgiving, we'll get a lot of data on consumer spending, especially during the Black Friday to Cyber Monday period.

But we'll also get, soon after the Thanksgiving holiday, the November ISM data for manufacturing and services, ADP's November employment report, and hopefully, hopefully, some other pieces will start to flow.

But as we think about all this, remember that the market, isn't too far off its highs. And when we hit these types of points, the market can get a little jumpy, especially if we're getting mixed messages, and that is what we're getting. I would say, how are we thinking about this? Based on what we've seen so far, we're kind of in the camp that the Fed is likely to skip a December cut.

And again, it may be redundant, but we have more data coming, especially on the inflation front and on the job creation front, employment front. We'll be following it. And if we need to course correct our thinking and anything in the portfolio, we will.

Now, let's just stick for a second with the end of the shutdown. Now, in our opening comments, we discussed the reopening, how it could likely take some time. Folks that are returning will need to dig out, get caught up, and candidly process papers and work things through. As we think about that, there is the possibility that we could see a little bit of lull in government program activity and awards.

But in our view, that's likely to be a speed bump at best, or at worst, I should say, not at best, at worst. But carrying that through, when we think about some of the companies in the portfolio that are kind of tied to the public sector, ServiceNow, Palantir, remember, their recent earnings reports, their backlog numbers, the order numbers they shared, all that activity was really through the end of September.

The shutdown as we know it began, October 1st. So it stands to reason that we could see some softness in the current quarter. It is also possible that the management teams kind of baked that into their forward guidance. But I would argue that this potential lull, I think is really what we're seeing weigh way on some of these shares, particularly ServiceNow and more recently, Palantir.

What this does mean is we will want to see what the management teams have to say about all of this during the upcoming investor conference season. It's already started for some. It's going to accelerate over the next couple of weeks and into early December. And with that in mind, we will be paying attention to what ServiceNow says next week when it appears that the RBC Capital Markets' boy, this is a mouthful, Global Technology, Internet Media, And Telecommunications Conference.

I will also say though that because this is likely to be a speed bump, we are going to continue to focus in on 2026. Why? Well, for a couple of reasons, including at that point, we should hopefully see the Federal government back to work in a more sustained manner. We'll see. But hopefully that's the case.

But I would also share with you one of the signals that we discussed over the weekend. Yes, I'm referring to the one from McKinsey that said, roughly a third of enterprise customers that it surveyed have only started to ramp AI beyond a single use. We see that AI ramp accelerating in 2026, into 2027.

Remember, we've been talking about where are we in the overall AI adoption and usage curve. Still in the relatively early innings. Call it the third inning, maybe approaching the fourth inning, but still a lot to go. Also remember too that we are going to see the consumer use of AI rise as more smartphones are equipped with AI and as the AI PC upgrade cycle continues, something that's positive for Qualcomm.

So when you put all that together, we are longer term bullish, not only on the shares of ServiceNow and Palantir, but also the AI infrastructure plays that we have in the portfolio. Specifically, because I know we're going to get some questions, with Palantir, we are watching the 168 level pretty closely. There's some nice support there.

With ServiceNow, we are looking for a successful test of the August lows. That kind of clocks in around 830, 835. At that point, if we see some nice successful tests of those technical levels, that I think will lead some folks back into those names, and we'll continue to watch those as well given some potential room we might have in the portfolio.

And just real quickly, as it touches on our AI infrastructure plays, you probably noticed that last night, Cisco reported very nice quarter and very supportive of AI and the data center build-out. The company cited robust demand from AI infrastructure and deepening use cases. If you think about my comment about the McKinsey findings, deepening use cases or expanding use cases, that's really what we're talking about inside the enterprise.

Cisco also shared, and this is really important, networking product orders accelerated to a high teens growth rate in the quarter. That was the fifth consecutive quarter of double digit growth. What was the driving forces behind it? Hyperscale infrastructure, enterprise routing, campus switching, wireless, industrial IoT and servers.

We certainly see that supporting the non-AI and non-data center business inside of Marvell. With the market trading off as it relates to Marvell shares, we do see multiple layers of support between 76 and 83. And as we think about those levels balanced against our 125 price target, we will be watching them closely, keeping an eye on our two rating, if you catch my drift.

Now, I will say that we've got a lot more coming your way this afternoon and tomorrow. Speaking of tomorrow, I will be subbing in The Daily Diary for Doug, so please join us over there. And again, folks, stay tuned. We've got much, much more coming your way before we get to the end of the week. Thanks for watching.