# Picks commentary

> Dated notes that read the whole list of picks at one point in time: what changed, which themes got stronger or weaker, and what to watch. Newest first. Page: https://picks.kamadorueda.com/commentary/

Picks is a personal record of stock picks. It gives information only, not financial, investment, tax or legal advice. Prices, fair values and ratings can be delayed or wrong; check the original source. Full disclaimer: /disclaimer/.

## Lenders join the AI build-out as 20 picks get ready to report

Date: 2026-10-12. Page: https://picks.kamadorueda.com/commentary/2026-10-12/

More of the money for AI chips and data centers now comes from loans, guarantees and new shares, and less from the spenders' own cash. The consumer staples raise prices again and pay more to borrow. Several recent results were helped by one-time gains, and 20 picks report between October 13 and October 29.

### Lenders join the AI build-out

The AI build-out now leans on borrowing and guarantees, and less on the spenders' own cash. Broadcom backs a financial partner's leases of AI racks to one customer. If that customer does not pay, Broadcom pays the difference between 85% of the amount owed and the sale value of the racks, up to about $29 billion. The same customer can also issue up to $42 billion of convertible notes to Broadcom. On October 7 Bloomberg reported early talks on about $30 billion of debt for OpenAI's Broadcom chips, and the Wall Street Journal put the figure above $50 billion. Nvidia guarantees up to $105 billion of lease and power payments for an OpenAI data center campus in Ohio, starting in fiscal 2029. Its CFO said that AI labs that Nvidia backs with its balance sheet will be roughly a quarter of its business next year.

The spenders borrow too. In the first half of 2026 Alphabet issued $51.8 billion of notes, and in June it raised $49.6 billion net from new common and preferred stock. In August it sold $25.0 billion more of notes. Amazon held about $219 billion of Anthropic and OpenAI stock and notes at June 30, 2026. Press reports say Moody's expects Microsoft's free cash flow after dividends to be about $4 billion negative in total over fiscal 2027 and 2028.

Demand itself still looks strong. TSMC's third-quarter revenue was about NT$1.49 trillion, about 50% more than a year earlier and above its own guidance. At its October 6 Investor Day, Marvell raised its fiscal 2029 custom chip outlook to more than $12 billion, from more than $10 billion. Synopsys rose 12.8% on October 1 after its fiscal 2027 guidance came in above the analysts' consensus, and it now trades only 1.9% below its fair value. The risk has moved to the credit markets: if lenders pull back, orders can slow even while end demand stays strong.

Companies: [AVGO](https://picks.kamadorueda.com/company/AVGO.md), [NVDA](https://picks.kamadorueda.com/company/NVDA.md), [GOOGL](https://picks.kamadorueda.com/company/GOOGL.md), [AMZN](https://picks.kamadorueda.com/company/AMZN.md), [MSFT](https://picks.kamadorueda.com/company/MSFT.md), [TSM](https://picks.kamadorueda.com/company/TSM.md), [MRVL](https://picks.kamadorueda.com/company/MRVL.md), [SNPS](https://picks.kamadorueda.com/company/SNPS.md)

### Courts and regulators set the calendar

For several picks, the next big event is a court or a regulator, not a quarterly report. Meta expects about $10 billion of legal expense in its third quarter for its settlement with 52 state and territory attorneys general. In a second New Mexico case, the state asked a judge for $35 billion to $40 billion in penalties, and the judge is expected to rule in late October, close to Meta's report.

AppLovin now faces four legal fronts at once: a securities class action filed in September 2026, an older one from 2025, a suit that San Diego County filed on October 5, and its arbitration with Unity. Its fair value stayed at $470 while the stock fell about 43% in the third quarter.

Alibaba has been on the US Defense Department's list of Chinese military companies since June 8, 2026, and it is suing to get off it. Good results cannot remove that part of its discount. In California, the Assembly adjourned on September 1 without a vote on the wildfire reform bill, PG&E suspended its five-year plan on September 2, and Fitch moved PG&E's outlook to negative on September 16. The state regulator's proposed decision on the Kincade and Dixie fire costs, due on November 13, is PG&E's next hard evidence.

Companies: [META](https://picks.kamadorueda.com/company/META.md), [APP](https://picks.kamadorueda.com/company/APP.md), [BABA](https://picks.kamadorueda.com/company/BABA.md), [PCG](https://picks.kamadorueda.com/company/PCG.md)

### Fair values moved both ways

The fair value analysts changed several values in the past six weeks, and not always in the direction of the price. They raised Marvell to $360 from $300 after the October 6 Investor Day, their second raise in six weeks, so Marvell's discount widened to 23.5% even though the stock rose. They raised McDonald's to $295 from $270 after its September 23 Investor Day, while Wells Fargo, Guggenheim, KeyBanc and Bernstein cut their targets in the first week of October. On October 6 they raised their uncertainty rating for Copart to High, which widens the range around the $35 fair value.

At Honeywell Aerospace the two views stay far apart. After the August guidance cut, most analysts rate it Hold, with recent targets between $170 and $205, while the fair value is $256.

Experian's fair value on this site was wrong. The fair value analysts cut it to $42 from $45 per ADR on June 10, 2026, and cut the moat to Narrow on the same day, but the site showed $55 from the day the pick was added. At $35.48, Experian trades 15.5% below the correct value, not about 35% below. The October 1 note now uses the correct value.

Companies: [MRVL](https://picks.kamadorueda.com/company/MRVL.md), [MCD](https://picks.kamadorueda.com/company/MCD.md), [CPRT](https://picks.kamadorueda.com/company/CPRT.md), [HONA](https://picks.kamadorueda.com/company/HONA.md), [EXPGY](https://picks.kamadorueda.com/company/EXPGY.md)

### Staples raise prices and pay more to borrow

The consumer staples, where analysts are least hopeful, now face higher costs on both their goods and their debt. PepsiCo confirmed on October 9 that it will raise prices on some snacks and drinks by single-digit percentages, and named higher fuel, aluminum and farm costs. Its prices stay below their level at the start of 2026. After its third quarter, brokers cut their targets to between $126 (Barclays) and $165 (Goldman Sachs).

Campbell's issued junior notes at 8.5% on October 5, rated below investment grade, to repay 5.20% notes due in March 2027 and commercial paper. Moody's cut it to Baa3 with a negative outlook on September 23, and the board had already cut the dividend by 36%. At 53.7%, CPB still has the largest discount on the list.

Clorox guides fiscal 2027 organic sales growth of about 3.5% to 4.5%, but more than 3.5 points of that come from an easy comparison with fiscal 2026, when an ERP change disrupted orders. Its fiscal 2026 dividends of $602 million were larger than its free cash flow of $405 million. Procter & Gamble's fiscal 2026 growth came only from price, with flat volume, and it expects first-quarter core EPS to fall 5% or more. HSY reports on October 29 and CLX about November 2.

Companies: [PEP](https://picks.kamadorueda.com/company/PEP.md), [CPB](https://picks.kamadorueda.com/company/CPB.md), [CLX](https://picks.kamadorueda.com/company/CLX.md), [PG](https://picks.kamadorueda.com/company/PG.md), [HSY](https://picks.kamadorueda.com/company/HSY.md)

### One-time gains helped recent results

Several recent results looked better than the business underneath. At AutoZone, tariff refunds added 145 basis points and a LIFO gain 105 basis points to fourth-quarter gross margin, more than its whole rise of 182 basis points. Without them, the margin fell about 68 basis points, so the site's checkpoint for that quarter now reads failed. Tariff refunds also added 4 percentage points to PepsiCo's third-quarter core operating profit growth, and they stop after the third quarter.

UnitedHealth's medical care ratio improved to 86.7% in the second quarter of 2026, from 89.4%, but $860 million of favorable changes to earlier reserves helped. Its third-quarter test is the ratio against its full-year guide of about 88.1% without large reserve releases. Novo Nordisk's first-quarter profit included a one-time DKK 26.8 billion reversal of a US rebate provision, and Novo has warned of a possible non-cash impairment in the third quarter after a failed trial.

Companies: [AZO](https://picks.kamadorueda.com/company/AZO.md), [PEP](https://picks.kamadorueda.com/company/PEP.md), [UNH](https://picks.kamadorueda.com/company/UNH.md), [NVO](https://picks.kamadorueda.com/company/NVO.md)

### Rates move against the borrowers

Rates kept rising for the picks that need cheaper loans. The Freddie Mac 30-year mortgage rate rose from 6.43% on July 2 to 7.40% on October 8, and the 10-year Treasury yield was 5.24% on October 9. ICE bought Black Knight for a mortgage recovery that has turned the other way, but its exchanges carry the quarter: third-quarter trading volume was 31% higher than a year earlier. Pool sells to pool builders, and new in-ground pool construction in 2025 was just below 60,000 units, about half the 2021 peak of about 117,000. Brookfield and its asset manager fell about 20% from mid-August to late September.

Schwab earns more on client cash when rates rise, but its stock fell about 6% on September 22 on fear that AI assistants such as Meta's Muse could weaken client loyalty. Its August core net new assets were 46% higher than a year earlier. Capital limits its buybacks more than cash does: its adjusted Tier 1 leverage ratio of 6.8% sits at the bottom of its 6.75% to 7.00% target.

Companies: [ICE](https://picks.kamadorueda.com/company/ICE.md), [POOL](https://picks.kamadorueda.com/company/POOL.md), [BN](https://picks.kamadorueda.com/company/BN.md), [SCHW](https://picks.kamadorueda.com/company/SCHW.md), [META](https://picks.kamadorueda.com/company/META.md)

### The next two and a half weeks

From October 13 to October 29, 20 of the 44 picks report, and all but two of those dates are confirmed. UNH opens on October 13 with its first report since the 2027 Medicare Advantage star ratings. Analysts at J.P. Morgan and Stephens estimate that the share of its members in plans rated 4 stars or more fell to about 67%, from about 78%. Copart's offer for ACV Auctions expires on October 15, two days after the US antitrust waiting period ends, and TSM and SCHW report the same day.

SAP (October 21) and RELX (October 22) are again the first tests of the fear that AI tools will replace software and data. PG, PCG and POOL also report on October 22. October 28 is the busiest day: MSFT, GOOGL, NOW, HONA and OTIS report, META is expected to, and the Fed announces its rate decision. Microsoft guides Azure growth of 44% to 45% in constant currency, on a new definition that leaves out GitHub cloud and some security and healthcare products. Meta's profit will carry its legal charge, so its cash flow gives the clearer reading. ICE and HSY report on October 29, AMZN is expected the same day, and MarketAxess holders vote on ICE's offer.

Most AI suppliers report later, after their customers have set their plans: NVDA about November 18, MRVL about December 1, SNPS about December 9 and AVGO about December 10. All four dates are estimates.

Companies: [UNH](https://picks.kamadorueda.com/company/UNH.md), [CPRT](https://picks.kamadorueda.com/company/CPRT.md), [TSM](https://picks.kamadorueda.com/company/TSM.md), [SCHW](https://picks.kamadorueda.com/company/SCHW.md), [SAP](https://picks.kamadorueda.com/company/SAP.md), [RELX](https://picks.kamadorueda.com/company/RELX.md), [PG](https://picks.kamadorueda.com/company/PG.md), [PCG](https://picks.kamadorueda.com/company/PCG.md), [POOL](https://picks.kamadorueda.com/company/POOL.md), [MSFT](https://picks.kamadorueda.com/company/MSFT.md), [GOOGL](https://picks.kamadorueda.com/company/GOOGL.md), [NOW](https://picks.kamadorueda.com/company/NOW.md), [HONA](https://picks.kamadorueda.com/company/HONA.md), [OTIS](https://picks.kamadorueda.com/company/OTIS.md), [META](https://picks.kamadorueda.com/company/META.md), [ICE](https://picks.kamadorueda.com/company/ICE.md), [HSY](https://picks.kamadorueda.com/company/HSY.md), [AMZN](https://picks.kamadorueda.com/company/AMZN.md), [NVDA](https://picks.kamadorueda.com/company/NVDA.md), [MRVL](https://picks.kamadorueda.com/company/MRVL.md), [SNPS](https://picks.kamadorueda.com/company/SNPS.md), [AVGO](https://picks.kamadorueda.com/company/AVGO.md)

## Two suppliers reach fair value as the AI bill moves off the books

Date: 2026-10-10. Updated: 2026-10-12. Page: https://picks.kamadorueda.com/commentary/2026-10-10/

Most picks rose in the first nine days of October, and two AI suppliers, CEG and SNPS, climbed to within 2% of their fair values. The money behind AI is starting to move off the spenders' balance sheets. PepsiCo's report sided with Wall Street analysts on consumer staples, and Microsoft reports on the day the Fed decides on rates.

### Two AI suppliers close their gaps

Prices moved up across the list. From October 1 to the close of October 9, 39 of the 48 picks with a price on both days rose, and the median pick gained 3.1%.

The largest gains came from two AI suppliers. CEG and SNPS each rose 17.3%. CEG now trades 0.9% below its fair value, and SNPS 1.9% below it, so for these two the discount that brought them onto the list is almost gone.

Some of the companies that AI tools could hurt also rose more than the list: INTU gained 9.8%, RELX 8.9%, EXPGY 8.7% and NOW 5.1%. None of the four reported news in these nine days, and each still trades more than 14% below fair value.

Companies: [CEG](https://picks.kamadorueda.com/company/CEG.md), [SNPS](https://picks.kamadorueda.com/company/SNPS.md), [INTU](https://picks.kamadorueda.com/company/INTU.md), [RELX](https://picks.kamadorueda.com/company/RELX.md), [EXPGY](https://picks.kamadorueda.com/company/EXPGY.md), [NOW](https://picks.kamadorueda.com/company/NOW.md)

### The AI bill starts to move off the balance sheet

Two reports this month show the cost of AI chips moving away from the companies that use them. On October 2 the Financial Times reported that Amazon is in talks to move about $8 billion of Nvidia chips into a separate company and lease them back. On October 7 Bloomberg reported early talks on about $30 billion of debt for OpenAI's Broadcom chips, and the Wall Street Journal put the figure above $50 billion. Both are talks, and the size and terms can change.

This ties AVGO, AMZN and NVDA more closely to the credit markets. If lenders become less willing, chip orders that depend on this money could slow, even if the end demand stays strong.

For now, demand looks strong. TSMC's September revenue was about NT$511.9 billion, 54.6% more than a year earlier, and its revenue for the first nine months of 2026 was up 41.1%. TSM reports its full third quarter on October 15.

Companies: [AMZN](https://picks.kamadorueda.com/company/AMZN.md), [AVGO](https://picks.kamadorueda.com/company/AVGO.md), [NVDA](https://picks.kamadorueda.com/company/NVDA.md), [TSM](https://picks.kamadorueda.com/company/TSM.md)

### PepsiCo sides with Wall Street analysts on staples

The October 1 note showed that Wall Street analysts are much less hopeful than the fair value analysts about the consumer staples near the top of the list. PepsiCo's third quarter, reported on October 8, supports the Wall Street analysts' view.

In PepsiCo's North America food business, volume grew 0.5%, net pricing fell 1% and core operating profit fell 12% in constant currency. North America beverage organic volume fell 3%. PepsiCo cut its 2026 guidance for core constant currency EPS growth to 1% to 2%, from the low end of 4% to 6%, and named rising input costs. In July its CEO had already blamed a weaker US consumer.

CPB fell 3.1% after October 1 and now has the largest discount on the list, 53.7%. CLX (45.6%) and HSY (29.2%) have not reported yet. HSY reports on October 29, a date Hershey confirmed on October 9, and CLX about November 2, an estimate.

Companies: [PEP](https://picks.kamadorueda.com/company/PEP.md), [CPB](https://picks.kamadorueda.com/company/CPB.md), [CLX](https://picks.kamadorueda.com/company/CLX.md), [HSY](https://picks.kamadorueda.com/company/HSY.md)

### Rates and a crowded October 28

The US labor market is cooling while the Fed still leans toward tighter policy. The September jobs report, released on October 2, showed 29,000 new jobs, and unemployment of 4.2%. The minutes of the September Fed meeting, released on October 7, said that most members saw another rate rise as likely to be appropriate by the end of the year.

The next Fed meeting ends on October 28. Microsoft and Alphabet have confirmed that they report the same day, after the market closes. META and AMZN are expected to report on October 28 and October 29, but those dates are still estimates on this site. A rate decision and the results of the largest AI spenders can arrive within a few hours of each other.

Companies: [MSFT](https://picks.kamadorueda.com/company/MSFT.md), [GOOGL](https://picks.kamadorueda.com/company/GOOGL.md), [META](https://picks.kamadorueda.com/company/META.md), [AMZN](https://picks.kamadorueda.com/company/AMZN.md)

### What to watch next week

UNH reports on October 13. On October 8 the US government published its 2027 Medicare Advantage star ratings, and analysts at J.P. Morgan and Stephens estimate that UNH's share of members in plans rated 4 stars or higher fell to about 67%, from about 78%. That is an analysts' estimate, and UNH has not given its own figure.

Copart's offer for ACV Auctions now runs to October 15. By October 8, 52.84% of ACV's shares had been tendered, which meets the minimum condition, and the US antitrust waiting period ends on October 13.

TSM and SCHW report on October 15. In Qualcomm's case against Arm, the jury began to decide on October 9, and the judge has a separate ruling still to give. QCOM fell 4.6% after October 1.

Companies: [UNH](https://picks.kamadorueda.com/company/UNH.md), [CPRT](https://picks.kamadorueda.com/company/CPRT.md), [TSM](https://picks.kamadorueda.com/company/TSM.md), [SCHW](https://picks.kamadorueda.com/company/SCHW.md), [QCOM](https://picks.kamadorueda.com/company/QCOM.md)

## The biggest discounts are the slowest to close

Date: 2026-10-01. Updated: 2026-10-12. Page: https://picks.kamadorueda.com/commentary/2026-10-01/

The widest discounts on the list mostly belong to companies whose gap will close slowly, or probably never. Wall Street analysts are far less hopeful than the fair value analysts about the consumer staples near the top of the list. AI links a large part of the list, and the four US AI spenders all report in the last week of October.

### AI ties much of the list together

Nearly half the list depends on AI in one way or another: 23 of the 48 picks have at least one AI theme. Five are spenders: GOOGL, MSFT, META, AMZN and BABA. Nine are suppliers: NVDA, AVGO, TSM, MRVL, SNPS, QCOM, CEG, SPGI and BN. Ten could lose business to AI tools: NOW, SAP, INTU, CSU, RELX, EXPGY, BR, SCHW, APP and GOOGL. GOOGL appears twice, because it spends heavily on AI while AI answers can also take clicks away from Search.

The spenders and the suppliers stand on the same ground. The data center budgets of MSFT, AMZN, GOOGL and META drive much of the AI demand at NVDA, AVGO, TSM and MRVL. SPGI earns rating fees when companies sell bonds to pay for data centers, and BN and CEG sell power and sites to AI customers. Together the two groups make up 14 of the 48 picks, and a cut in the spenders' budgets would reach all 14 at the same time. The list as a whole does best if AI spending continues and pays back.

The market is far more worried about the companies AI could replace than about the ones paying for it. The median discount is 16.9% for the spenders and 15.9% for the suppliers, but 26.6% for the companies that AI tools could hurt. RELX and BR carry some of the largest discounts in that group, and only several years of steady growth can prove the fear wrong.

Companies: [GOOGL](https://picks.kamadorueda.com/company/GOOGL.md), [MSFT](https://picks.kamadorueda.com/company/MSFT.md), [META](https://picks.kamadorueda.com/company/META.md), [AMZN](https://picks.kamadorueda.com/company/AMZN.md), [BABA](https://picks.kamadorueda.com/company/BABA.md), [NVDA](https://picks.kamadorueda.com/company/NVDA.md), [AVGO](https://picks.kamadorueda.com/company/AVGO.md), [TSM](https://picks.kamadorueda.com/company/TSM.md), [MRVL](https://picks.kamadorueda.com/company/MRVL.md), [SNPS](https://picks.kamadorueda.com/company/SNPS.md), [QCOM](https://picks.kamadorueda.com/company/QCOM.md), [CEG](https://picks.kamadorueda.com/company/CEG.md), [SPGI](https://picks.kamadorueda.com/company/SPGI.md), [BN](https://picks.kamadorueda.com/company/BN.md), [NOW](https://picks.kamadorueda.com/company/NOW.md), [SAP](https://picks.kamadorueda.com/company/SAP.md), [INTU](https://picks.kamadorueda.com/company/INTU.md), [CSU](https://picks.kamadorueda.com/company/CSU.md), [RELX](https://picks.kamadorueda.com/company/RELX.md), [EXPGY](https://picks.kamadorueda.com/company/EXPGY.md), [BR](https://picks.kamadorueda.com/company/BR.md), [SCHW](https://picks.kamadorueda.com/company/SCHW.md), [APP](https://picks.kamadorueda.com/company/APP.md)

### Where the fair value and Wall Street analysts disagree

Analysts mostly like these stocks. On the LSEG scale, which runs from 1 (strong buy) to 5 (strong sell), the median rating is 1.97, and 24 of the 47 rated picks sit below 2. Nine picks are rated 2.5 or higher, closer to hold than to buy.

Six of those nine also trade at least 25% below their fair value: CPB, CLX, HONA, HSY, POOL and PEP. Four of them are consumer staples. CPB and CLX are the only picks rated above 3, and they have the largest and the third largest discount in the list. The fair value analysts see wide moats and a temporary problem. The Wall Street analysts see falling volumes, high debt and, at CPB, guidance for a second year of decline. A split this wide can point to a value trap, where the price stays low because earnings keep falling. Unit volume is the test. PEP reports on October 8, followed by HSY (about October 30), CLX (about November 3) and CPB (about December 3).

On six picks the two sources agree, with a discount of at least 30% and an analyst rating below 2: AVGO, APP, BABA, WYNN, RELX and YUMC. Agreement does not make a gap close faster. Only AVGO and APP have a gap that a dated event can close. BABA and YUMC carry country risk, and WYNN and RELX need several years.

At the other end, NVO and QCOM trade at a small discount or a premium, and analysts rate them near hold. Neither source sees much upside there.

Companies: [CPB](https://picks.kamadorueda.com/company/CPB.md), [CLX](https://picks.kamadorueda.com/company/CLX.md), [HONA](https://picks.kamadorueda.com/company/HONA.md), [HSY](https://picks.kamadorueda.com/company/HSY.md), [POOL](https://picks.kamadorueda.com/company/POOL.md), [PEP](https://picks.kamadorueda.com/company/PEP.md), [AVGO](https://picks.kamadorueda.com/company/AVGO.md), [APP](https://picks.kamadorueda.com/company/APP.md), [BABA](https://picks.kamadorueda.com/company/BABA.md), [WYNN](https://picks.kamadorueda.com/company/WYNN.md), [RELX](https://picks.kamadorueda.com/company/RELX.md), [YUMC](https://picks.kamadorueda.com/company/YUMC.md), [NVO](https://picks.kamadorueda.com/company/NVO.md), [QCOM](https://picks.kamadorueda.com/company/QCOM.md)

### Discounts that will probably not close

A large discount, on its own, says little. Of the eight largest discounts in the list, only AVGO's and HONA's can close through a dated event within about two years. Among the picks below fair value, the median discount is 21.2% where the gap can close, 31.5% where it closes slowly, and 40.2% where it will probably not close. A gap can also shrink from the other side: in recent weeks the fair value analysts cut the fair value for four picks (CEG, CPRT, POOL and VNOM) as their prices fell.

Eight picks have a gap that will probably never close: BABA, YUMC, TSM, PCG, BTI, BN, SUGR and COST. For these, a ranking by discount makes the opportunity look larger than it is.

Country risk is the most common reason. BABA and YUMC depend on China, and US-China tension can move their prices whatever their results show. BABA also trades through a VIE structure that gives ADR holders no direct ownership. TSM makes most of its advanced chips in Taiwan. Strong results can close the part of its gap that comes from execution, but not the part that comes from Taiwan-China risk.

The other reasons are legal or structural. PCG faces open-ended wildfire liability in California, and on September 1, 2026 the Assembly adjourned without a vote on the reform bill. BN is a holding company with many layers, and the layers remain after its merger. Many investors do not own tobacco, so the market will probably always pay less for BTI's cash flow. At SUGR, the founder controls the company, the stock trades very little, and minority holders cannot block a bid from Beta San Miguel.

COST is the opposite case. It trades above its fair value, and investors have paid that premium for many years in return for its predictable membership profit. The premium can get smaller if growth slows, but nothing in the research suggests the market will stop paying for that certainty.

NVO and HSY also have controlling owners, a foundation and a trust, but their discounts come from business problems that can change, so they are not in this group. WYNN (Macau), CEG (a Crane restart that can slip to 2031) and VNOM (Diamondback decides the drilling) should close slowly, yet part of their discount may also last.

Companies: [AVGO](https://picks.kamadorueda.com/company/AVGO.md), [CPRT](https://picks.kamadorueda.com/company/CPRT.md), [POOL](https://picks.kamadorueda.com/company/POOL.md), [BABA](https://picks.kamadorueda.com/company/BABA.md), [YUMC](https://picks.kamadorueda.com/company/YUMC.md), [TSM](https://picks.kamadorueda.com/company/TSM.md), [PCG](https://picks.kamadorueda.com/company/PCG.md), [BTI](https://picks.kamadorueda.com/company/BTI.md), [BN](https://picks.kamadorueda.com/company/BN.md), [SUGR](https://picks.kamadorueda.com/company/SUGR.md), [COST](https://picks.kamadorueda.com/company/COST.md), [NVO](https://picks.kamadorueda.com/company/NVO.md), [HSY](https://picks.kamadorueda.com/company/HSY.md), [WYNN](https://picks.kamadorueda.com/company/WYNN.md), [CEG](https://picks.kamadorueda.com/company/CEG.md), [VNOM](https://picks.kamadorueda.com/company/VNOM.md)

### Higher rates test the borrowers

The Federal Reserve raised rates in September 2026, and the 10-year Treasury yield went above 5%. That hurts the picks that carry a lot of debt, and the ones that investors value like bonds.

Debt is a main risk for 12 picks, and leverage is highest at SUGR, CPB and CLX. SUGR's leverage ratio is 5.5 times, and most of its bank lines are uncommitted. CPB's is about 4.9 times on Moody's measure (about 4.3 times on its own), and Moody's keeps a negative outlook. CLX's net debt is about 4.2 times its fiscal 2026 EBITDA after the GOJO purchase. All three sell to price-sensitive shoppers, so weaker sales push the debt ratio up.

Some picks must refinance soon, at higher rates. WYNN still has about $1.35 billion of debt due in 2027 after its September refinancing, and holders can put back $600 million of convertible bonds in March 2027, and YUM has about $1.6 billion due in 2027. YUMC must refinance a bridge loan of about $1.2 billion within about a year of August 2026. HONA carries about $16 billion of debt from its spin-off and pays no dividend yet. META and BN now borrow at higher rates than before, and BN's real estate business has $64.8 billion of property debt with an average term of only 2 years.

Rates also change value directly. Higher rates lower what investors will pay for the steady royalties of MCD and YUM. They slow new mortgages at ICE and new pools at POOL, and they lower the value of BN's listed holdings. Two picks gain, because SCHW and MRX earn interest on client cash. On balance, more picks lose than gain when rates rise.

Companies: [SUGR](https://picks.kamadorueda.com/company/SUGR.md), [CPB](https://picks.kamadorueda.com/company/CPB.md), [CLX](https://picks.kamadorueda.com/company/CLX.md), [WYNN](https://picks.kamadorueda.com/company/WYNN.md), [YUM](https://picks.kamadorueda.com/company/YUM.md), [YUMC](https://picks.kamadorueda.com/company/YUMC.md), [HONA](https://picks.kamadorueda.com/company/HONA.md), [META](https://picks.kamadorueda.com/company/META.md), [BN](https://picks.kamadorueda.com/company/BN.md), [MCD](https://picks.kamadorueda.com/company/MCD.md), [ICE](https://picks.kamadorueda.com/company/ICE.md), [POOL](https://picks.kamadorueda.com/company/POOL.md), [SCHW](https://picks.kamadorueda.com/company/SCHW.md), [MRX](https://picks.kamadorueda.com/company/MRX.md)

### The next five weeks

Between October 1 and November 5, 2026, 30 of the 48 picks report earnings. The companies have confirmed 15 of these dates, and the other 15 are estimates. By the end of November, 42 picks will have reported.

PEP opens the season on October 8 with an early view of the US consumer. UNH follows on October 13, then TSM and SCHW on October 15. TSM is the first AI supplier to report, and what it says about AI demand and 2027 prices will be a first signal for the whole supplier group. SAP (October 21) and RELX (October 22) are the first tests of the fear that AI tools will replace software and data. PG, PCG and POOL also report on October 22.

The last week of October is the busiest, with 12 reports from October 27 to October 30. It includes the four US AI spenders: GOOGL and MSFT about October 27, and META and AMZN about October 29, all four dates estimates. Their capital spending plans for 2027 matter more to this list than any other numbers, because the AI suppliers depend on them. NOW and HONA report on October 28, and ICE on October 29, the same day as the MarketAxess shareholder vote.

From November 2 to November 5, nine picks report, mostly companies that sell to consumers: YUMC, CLX, WYNN and MCD, along with VNOM, BR, OTIS, NVO and APP. By November 5, eight of the ten weak-consumer picks will have reported.

Most AI suppliers report later, after their customers have set out their plans: NVDA about November 17, SNPS about November 26, MRVL about November 27 and AVGO about December 10. Two other dates fall in the window: the MRVL Investor Day on October 6, and the FDA decision on NVO's CagriSema, due in Q4 2026.

Companies: [PEP](https://picks.kamadorueda.com/company/PEP.md), [UNH](https://picks.kamadorueda.com/company/UNH.md), [TSM](https://picks.kamadorueda.com/company/TSM.md), [SCHW](https://picks.kamadorueda.com/company/SCHW.md), [SAP](https://picks.kamadorueda.com/company/SAP.md), [RELX](https://picks.kamadorueda.com/company/RELX.md), [PG](https://picks.kamadorueda.com/company/PG.md), [PCG](https://picks.kamadorueda.com/company/PCG.md), [POOL](https://picks.kamadorueda.com/company/POOL.md), [GOOGL](https://picks.kamadorueda.com/company/GOOGL.md), [MSFT](https://picks.kamadorueda.com/company/MSFT.md), [META](https://picks.kamadorueda.com/company/META.md), [AMZN](https://picks.kamadorueda.com/company/AMZN.md), [NOW](https://picks.kamadorueda.com/company/NOW.md), [HONA](https://picks.kamadorueda.com/company/HONA.md), [ICE](https://picks.kamadorueda.com/company/ICE.md), [YUMC](https://picks.kamadorueda.com/company/YUMC.md), [CLX](https://picks.kamadorueda.com/company/CLX.md), [WYNN](https://picks.kamadorueda.com/company/WYNN.md), [MCD](https://picks.kamadorueda.com/company/MCD.md), [VNOM](https://picks.kamadorueda.com/company/VNOM.md), [BR](https://picks.kamadorueda.com/company/BR.md), [OTIS](https://picks.kamadorueda.com/company/OTIS.md), [NVO](https://picks.kamadorueda.com/company/NVO.md), [APP](https://picks.kamadorueda.com/company/APP.md), [NVDA](https://picks.kamadorueda.com/company/NVDA.md), [SNPS](https://picks.kamadorueda.com/company/SNPS.md), [MRVL](https://picks.kamadorueda.com/company/MRVL.md), [AVGO](https://picks.kamadorueda.com/company/AVGO.md)