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