The desk note — Thursday, October 29, 2026

The note

Stocks slipped Thursday as Alphabet fell 12.6% on its surge in AI spending, even though about four in five S&P 500 companies rose; after the close, Amazon and Reddit fell sharply in late trading despite strong quarters. The desk kept all ten holdings and the bench: Amazon's cloud business grew 39% with a record profit margin, so it stays. What changed is Reddit, which moves from Buy Zone to Holding: its US daily users fell for a second quarter, so the desk stops adding until they recover.

What would change our mind: A third fall in Reddit's US users, or Amazon's spending outrunning its operating cash into 2027, would change the desk's mind.

What changed

• RDDT moved to Holding (from the Buy Zone)

By zone

Buy Zone

Four great companies at clear discounts to value; the desk adds to three on weakness and is weighing Meta's new share sales first.

• TSMC, Micron, ASML and Meta trade 19% to 35% below our value
• Adding: TSMC below $450 · Micron below $1,090 · ASML below $1,700 · Meta below $560
• Meta's new share sales are under review before any fresh money goes in

Holding

Six holdings kept for their businesses; Reddit joins them after its US users fell again, and Alphabet and Broadcom carry no adds.

• Reddit joins Holding: US users fell again, so no fresh money until they recover
• Amazon's cloud grew 39% with a record margin; its stock fell 6% late on spending
• Alphabet sells new stock and burns cash, so the desk holds without adding

Bench

• Buy below: DELL $420 · MSFT $490 · GEV $800 · LMT $460 · AMAT $350
• Microsoft and GE Vernova reported strong quarters but trade only 11% to 12% below our value
• Applied Materials, 27% below our value, is the strongest bench case

Name by name

AMAT · Bench

Applied Materials leads chip deposition and etch and is raising its stake in packaging maker Besi; 27% below our value it is the strongest bench case, but it would add to chip weight, so entry waits below $350.

AMAT's page →

AMZN · Holding

Amazon's cloud sales grew 39% with a 39% margin and its operating cash rose, but $77 billion of quarterly spending sank the stock about 6% late; it trades 27% below our value and the desk holds.

Add below $235 · review for sale near $305 · AMZN's page →

APP · Holding

AppLovin's ad engine stays highly profitable after a 27% fall since entry, but its last quarter missed its own guidance; its early-November 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 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 guarantees up to $43 billion of one customer's AI-rack leases; the desk holds a smaller position and reviews for sale near $430.

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

DELL · Bench

Dell's AI-server backlog is real, but cash flow lags its adjusted figures; it fell to about $441 late with no company news, 17% below our value, and the desk waits below $420.

DELL's page →

GEV · Bench

GE Vernova's orders nearly doubled to $29 billion, its backlog reached $197 billion and it doubled its buyback, but at 12% below our value the desk waits below $800.

GEV's page →

GOOGL · Holding

Alphabet's cloud revenue doubled, but heavy spending pushed free cash flow negative and it sold $12.4 billion of stock; the shares fell 12.6% and the desk holds without adding.

Add below $260 · review for sale near $350 · GOOGL's page →

LMT · Bench

Lockheed converts earnings to cash well and raised its cash-flow outlook, but it trades about 4% above our value; the desk waits below $460.

LMT's page →

META · Buy Zone

Meta closed $12.5 billion of convertible preferred stock and sold 40 million shares for later delivery to fund its AI build-out; it trades 25% below our value, but the desk will not add until it has weighed the dilution.

Add below $560 · review for sale near $780 · META's page →

MSFT · Bench

Microsoft's cloud grew 30% with a $677 billion commercial backlog, and it is now raising debt; at 11% below our value there is no margin of safety, so 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, and it trades 35% below our value.

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

NVDA · Holding

NVIDIA remains the core AI-chip franchise and its biggest customers keep raising spending; it trades 30% below our value, and the desk waits for its Nov 17 report and a price below $195 to add.

Add below $195 · review for sale near $300 · NVDA's page →

RDDT · Holding

Reddit grew revenue 53% with a 32% profit margin, but US daily users fell for a second quarter, to 50.7 million, and its outlook came in light; the stock fell 18% late, and the desk stops adding.

Add below $90 · review for sale near $150 · RDDT's page →

TSM · Buy Zone

TSMC is still the bottleneck for leading-edge AI chips, and Amazon's $77 billion quarter of spending is more demand; it trades 19% below our value.

Add below $450 · review for sale near $518 · TSM's page →