Top Stock Ideas, Growing U.S. Debt, AI & The Restaurant Industry 10/16/26

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Kelly Evans (1:06)

Welcome to Power Lunch everybody. I'm Kelly Evans alongside Dominic Chu today. Brian is off. Concerns about AI spending? They're still on and sending shockwaves through the market, with Tech On Pace for its worst week in more than a year, and the company at the center of the tech trouble CoreWeave, losing a quarter of its value this week. Speaking of tech, two of the leading companies in artificial intelligence are being targeted by the Federal Trade Commission Chairman Andrew Ferguson in his first interview since issuing subpoenas to OpenAI and Anthropic.

Dominic Chu (1:35)

All right, and getting an online booking at an in-demand restaurant is proving harder and harder than ever, and it may not be due solely to popularity. Reservation systems are experiencing a wave of, guess what, AI agents competing with human foodies at that prime table. The CEO of OpenTable, Debby Soo, is here, and so is restaurateur extraordinaire and celebrity chef Tyler Florence on just how to navigate all of the AI in hospitality, Kelly.

Kelly Evans (2:03)

All right, let's begin with the markets, though, because stocks are lower, and we've really turned throughout the trading session today. It's been a volatile week for tech amid concerns about AI debt. The Neo clouds and the memory trades are under some pressure, even after some of them staged a sharp reversal yesterday. While energy, staples, utilities are higher, health care hitting another intraday record. But with just 10 tech-focused names, making up about 40 percent of the S&P 500 What does this rotation mean for the tech-led bull market? For more, let's bring in Mary Ann Bartels. She's the Chief Investment Strategist at Sanctuary Wealth, and Stephanie Link, the Chief Investment Strategist at Hightower. It's great to have you both here. Mary Ann, kick things off for us. Did you make any moves this week? Do you have any thoughts about whether CoreWeave is the canary in the coal mine?

Mary Ann Bartels (2:46)

I don't think it's the carrot canary in the coal mine. This kind of brings me back to like 97, 98 You can have events. And for those that don't remember that time period, you had a Thai-Bot crisis and you had long-term capital and the Russia debt crisis, and yet we went on to have the tech bubble.

I think these are isolated situations. I don't think we have contagions. I'm not seeing a systemic event. And this is all happening as the Mag-7 just recently hit a record all-time high. So I'm staying with the tech trade. I still think semis are also participating. They've been hit. They're oversold. They're into good support.

Kelly Evans (3:24)

Are you a buyer there or you're just a holder?

Mary Ann Bartels (3:26)

I'm a buyer. Their valuations are cheap. Like if you look at the industry group and look at where their valuation is going out to 27, you're below market multiples. You're at 14 times. So yeah, I'm still a big buyer of tech. Now the breadth of the market is narrowed, but I don't think that can stop the market from moving higher.

Kelly Evans (3:45)

All right, Mary Ann, Stephanie, sit tight for just a second. We have Treasury Statement, the budget. We need some scary music for this. There it is. Steve Liesman has the details. Steve?

Steve Liesman (3:55)

Scary, but maybe not quite as scary. At 1.99 trillion, the deficit for fiscal year 2026 So not quite, but almost $2 trillion, up 217 billion. That is a 12% increase. It's not a record in and of itself. The 12% rise is the highest level since 2021, when we were spending a lot of money around the pandemic. How did we get there? Well, receipts rose 3%. That was good, but outlays rose 6%, both to record numbers. Individual taxes, they were up by 5%, but corporate taxes, well, they fell 9%.