Bank Earnings Kickoff, Tech Fueling Rally, Sarat Sethi Guest Host 10/13/26

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Sarah Malik (0:24)

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Brian Sullivan (0:59)

Hi, everybody. Welcome to Power Lunch. I am Brian Sullivan with Kelly Evans. And maybe we'll party like it's 1999 because big tech is back working. Most of the Magnificent 7 are higher with a new high for Apple. And with that, a new member of the $5 trillion club.

Kelly Evans (1:16)

And a bold prediction from legendary investor Paul Tudor-Jones, telling CNBC today that 2027 could be pretty challenging for the stock market. So how should investors prepare? Sarah Malik joins us. She's Nuveen's Chief Investment Officer, overseeing more than 2 trillion in assets. And she's here to help you navigate these markets.

Brian Sullivan (1:34)

All right. We've got a lot to do, but we'll start with what we'll call a tale of two tech trades today.

Apple hitting a new record high. And with that move, a move above $5 trillion in value. Apple now joining NVIDIA in that rarefied air in the $5 trillion value club. In the meantime, at least for today, investors forgetting about memory. Sandisk, Western Digital and Seagate all lower. And the CEO of Broadcom out on the tape warning that the need for capital, i.e. money, could be AI's next big hurdle. He said at a conference in Singapore, Quote, some investors are setting extreme expectations, almost like. They're in a casino.

So as investors weigh I spending against the promise of returns. Or exactly, this is the tech trade. And maybe. The entire market. Go from here. Let's kick things off with our opening panel. Joining us for the entire hour, our friend Sarat Sethi, managing partner at DCLA. He owns many of the MegaCap names, and Mark Newman is Bernstein Senior IT Hardware Analyst. He covers the memory stocks and and he- covers Apple as well. Mark, Sarat, great to have you on. We got you the whole hour, Sarat. We love that.

Is this gambling? Was Hock Tan, the CEO of Broadcom, speaking truth to market power?

Sarat Sethi (2:51)

So I will bring it back to what we talk about a lot is the portfolio approach of diversification. It becomes gambling when you overweight your portfolio in all stocks that are, I would say, Mag 7 or they're completely kind of momentum stocks. I think it's good to have stocks that are like NVIDIA, Broadcom, Apple, but you have to make sure that you're diversified and we'll talk about it more during the show, that you have other sectors in there too because everything doesn't just go to the sky. When you get revaluations.

Brian Sullivan (3:19)

The last couple of years, it kind of has.

Sarat Sethi (3:21)

It has, but then-

Brian Sullivan (3:22)

I mean, if you put grandma savings in Micron, grandma's on a yacht right now.

Sarat Sethi (3:28)

That's if she's sold and if she got lucky.

Mark Newman (3:31)

It's better if she put it in Sandisk. Right. Yeah.

Sarat Sethi (3:34)

So I would say yes, but over a 10-year period, you got to be right twice. You got to also know what to sell.

Kelly Evans (3:39)

Mark, jump in here.

Mark Newman (3:41)

Yeah. I mean, I think that there's still a lot of opportunity here. I mean, some of these memory stocks, yes, they've been on a tear. They're up a lot last year, but there's been a lot of fears recently. They've sold off quite a bit. And I think this is getting increasingly much more attractive here. And I think all the memory stocks and hard disk drive stocks, I think, are very attractive and quite a lot of upside here.

Kelly Evans (4:04)

Put up, guys, that Western Digital Chart again. So think it was a one year, maybe a year to date chart, but it shows this clear peak over the summer. There it is.

It's like a ski slope. And then you're coming down. I'm not a chartist, and I don't know if being a technician matters, but what happens, Mark, after you see a chart like this? Can it just pivot and go back up?