The desk note — Wednesday, October 28, 2026

The note

Stocks edged higher on Wednesday after the Fed held rates, led by Micron's 5.9% jump, while Alphabet fell about 10% in late trading even as its cloud revenue doubled, after reporting negative free cash flow and $12.4 billion of new stock sold. The desk kept all ten holdings and the bench: Alphabet's cloud business passed its test, so it stays, but the desk will not add while the company sells shares. What changed is a smaller Broadcom position after its second customer-lease guarantee of up to $43 billion, with the money moved into TSMC and Meta.

What would change our mind: Amazon and Reddit report Thursday: Amazon's cloud growth under 30% or a second fall in Reddit's US users would change the desk's mind.

What changed

No changes to the lineup.

By zone

Buy Zone

Five great companies trade well below our value in a fearful market; the desk adds to TSMC and Meta.

• TSMC, Micron, Reddit, ASML and Meta trade 17% to 42% below our value
• Adding: TSMC below $450 · Micron below $1,090 · Reddit below $155 · ASML below $1,700 · Meta below $640
• Reddit reports Thursday; a second fall in its US daily users would change the call

Holding

Five holdings stay with no fresh money: Alphabet and Broadcom carry new funding risks, and Amazon reports Thursday.

• Five holdings kept; no fresh money at today's prices
• Alphabet's cloud doubled, but negative cash flow and new stock sales mean no adding
• Amazon reports Thursday: cloud growth under 30% would break the case

Bench

• Buy below: DELL $450 · MSFT $490 · GEV $800 · LMT $460 · AMAT $350
• Microsoft and GE Vernova beat, but neither trades far enough below our value
• Applied Materials, 25% below our value, is the strongest bench case

Name by name

AMAT · Bench

Applied Materials leads chip deposition and etch with 30% net margins; 25% below our value it is the strongest bench case, but it would add to the portfolio's chip weight, so entry waits below $350.

AMAT's page →

AMZN · Holding

Amazon's $496 billion cloud backlog supports the case at 21% below our value; Thursday's report must show cloud growth near 35%, and growth under 30% would break it.

Add below $225 · review for sale near $305 · AMZN's page →

APP · Holding

AppLovin's ad engine stays highly profitable after a 25% fall since entry, but its last quarter missed its own guidance; the Nov 4 report decides whether growth is stabilizing.

Add below $230 · review for sale near $414 · APP's page →

ASML · Buy Zone

ASML is the only maker of EUV lithography tools and guided fourth-quarter sales up 22% to 30%; China's rising share of sales is the risk, and it trades 23% below our value.

Add below $1,700 · review for sale near $2,134 · ASML's page →

AVGO · Holding

Broadcom's custom AI chips stay central, but it now guarantees up to $43 billion more on one customer's AI-rack leases on top of an earlier guarantee; the desk holds a smaller position.

Add below $300 · review for sale near $430 · AVGO's page →

DELL · Bench

Dell's AI-server backlog is real, but its reported cash flow is far below its adjusted figure and it trades only 9% below our value; the desk waits below $450.

DELL's page →

GEV · Bench

GE Vernova's orders nearly doubled to $29 billion, its backlog reached $197 billion and it raised its cash-flow outlook and buyback; at 13% below our value the desk waits below $800.

GEV's page →

GOOGL · Holding

Alphabet's cloud revenue rose 103% to $30.7 billion with a 36% margin, but heavy spending pushed free cash flow negative and it sold $12.4 billion of stock; the desk holds and will not add.

Add below $260 · review for sale near $371 · GOOGL's page →

LMT · Bench

Lockheed raised its cash-flow outlook and converts earnings to cash better than any name here, but it trades at our value; the desk waits below $460.

LMT's page →

META · Buy Zone

Meta finalized $37.5 billion of stock offerings, including Class A shares at $625, to fund its AI build-out; the business still grows fast and trades 24% below our value, the largest discount outside chips.

Add below $640 · review for sale near $780 · META's page →

MSFT · Bench

Microsoft's cloud grew 30% with Azure up 48% and a $677 billion commercial backlog, but at 6% below our value there is no margin of safety; the desk waits below $490.

MSFT's page →

MU · Buy Zone

Micron's memory upcycle continues, with SK Hynix seeing AI memory demand outpacing supply through 2030; contract-price gains are slowing, so the desk holds its position below the $1,090 add level.

Add below $1,090 · review for sale near $1,327 · MU's page →

NVDA · Holding

NVIDIA remains the core AI-chip franchise, 27% below our value; customers are taking longer to pay, so the desk waits for its Nov 17 report and a price below $195 to add.

Add below $195 · review for sale near $292 · NVDA's page →

RDDT · Buy Zone

Reddit keeps improving revenue, profit and cash flow, but US daily users dipped for the first time; Thursday's report must show them recovering, and it trades 42% below our value.

Add below $155 · review for sale near $210 · RDDT's page →

TSM · Buy Zone

TSMC is still the bottleneck for leading-edge AI chips, guiding fourth-quarter sales up 12% to 16%; Microsoft doubled its quarterly capital spending on Wednesday, and TSMC trades 17% below our value.

Add below $450 · review for sale near $519 · TSM's page →