 The Morning Brief | Gregor Becker · Editor-in-Chief (M.Phil Economics, Oxford) |
| Tuesday, 27 October 2026 |
| Monday, then, and a costly one. Meta says it will raise up to $95bn in equity for its AI build-out, but only about $35bn is on offer now. The other $60bn waits on a share class that does not yet exist. 🧮 Also worth your time: • | Nu Holdings sank 16.9% and MercadoLibre 7.8% after Lula beat Flávio Bolsonaro in Sunday's runoff, as investors unwound their bets on a Bolsonaro win |
• | And Synopsys has our analysts split: Jordan would still buy it after the S&P upgrade - Jess sees 78.9x trailing earnings leaving little cushion. Read the debate below ⬇️ |
Editor's note: Europe is rearming, and our Defence Portfolio is positioned for it. See every holding.
| | Market Snapshot Index | 24h Change | YTD | S&P 500 | +0.70% | +11.9% | Nasdaq | +0.82% | +12.6% | Dow Jones | +0.28% | +8.2% | | | DAX | -0.01% | +3.5% | FTSE 100 | -0.84% | +7.3% | Euro Stoxx 50 | +0.23% | +3.2% | Nikkei 225 | +1.73% | +22.1% | Hang Seng | -0.73% | -12.5% |
• | Our take: The day was less about one catalyst than about waiting: traders sat ahead of a heavy run of tech earnings and a Fed rate call, with AI spending worries from last week still lingering. The standout story was Brazil, where Lula's election win hit local-exposure names hardest. |
| | Top of the Morning Meta Announces a $95bn Raise. $35bn of It Is Happening. |  | Meta is issuing new shares to fund its $95bn raise | • | 🧮 The rest: The other $60bn is an at-the-market program for new non-voting Class C shares, which cannot start until those shares begin trading, expected in the first quarter of 2027. It is a fundraising plan contingent on a share class that does not yet exist. |
• | 🤝 Friends with chips: Nvidia, AMD and Broadcom have expressed interest in buying up to $5bn of the stock. Meta buys a great many chips from them, so some of the money may take a short trip. |
Why it matters: Meta's shares were up about 2.4% premarket, after falling 7% on Thursday. Its five-year credit default swaps have roughly doubled since August, to about 120bps, so investors seem relieved to be paid in equity rather than worried about more debt. • | 🐟 Not everyone is Meta: Elon Musk said debt markets have almost entirely shut off access to money for companies without substantial revenue beyond AI data centers, and predicted "guppy-level death and consolidation" for 200+ neoclouds. CoreWeave fell in premarket trading. |
• | Our take: The headline number is the ambition; the $35bn is the transaction. Even so, a company with this much revenue is telling the market that AI spending now outruns what it earns. The market has decided to find that reassuring, as long as the checks clear. |
| | ➡️ Easy-to-Follow Portfolio |  | • | Rules, not hunches: A rules-based screen ranks the theme's names every week, with hard rules for what gets bought and what gets sold. |
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| | What’s up Yesterday's session, factoring in pre-market data 
| $NVDA +2.4% NVIDIA Corporation |
| $TSLA +5.2% Tesla, Inc. Tesla jumped 5.2% after a Barclays upgrade fed optimism about a potential tie-up with SpaceX, with shares rallying as the new week began. |
| $SKHY +4.1% SK hynix Inc. |
| $AVGO +2.3% Broadcom Inc. |
| $MU +3.0% Micron Technology, Inc. Micron gained 3.0% as investors assessed its technology strategy and efforts to address concerns about competition from China's ChangXin Memory Technologies, extending a rebound in the memory-chip maker's shares. |
| $INTC +4.0% Intel Corp. |
| What’s down 
| $NU -16.9% Nu Holdings Ltd. |
| $MELI -7.8% MercadoLibre, Inc. |
| $VZ -3.5% Verizon Communications Inc. |
| $DASH -6.1% DoorDash, Inc. |
| | ➡️ Your First Month Free |  | • | The offer: Enter code OXFORD26 at checkout and your first month of Defence Portfolio costs nothing. Cancel any time. |
| | Today's Debate → | Is Synopsys ($SNPS) still a buy after today's 6.3% jump, or is the market already paying full price for the AI chip design story? |
 | Jordan Bittencourt Bull 🐂 |
Yes. I would still buy Synopsys ($SNPS), the maker of chip-design software. • | The catalyst: S&P lifted Synopsys to 'BBB+' from 'BBB', citing strengthening long-term operating momentum. I think that is an independent credit check on the AI chip design story. Lower funding costs also help with whatever deals come next. |
• | The risk: Operating margin is 13.0% and return on invested capital is 1.7%, both far below the gross margin. That gap is the thing I would watch. If it stumbles, the multiple will notice well before any competitor headline does. |
• | The comparison: Cadence launched on-premises AI chip models, splitting from the Synopsys-OpenAI route. I believe that points to a two-player race to sell AI tooling. Synopsys grew revenue 15.1% year over year, which is enough pace to stay in it. |
 | Jess Langley Bear 🐻 |
No. At 78.9x trailing earnings, the market already pays a premium multiple for the AI design story. A jump on top of that leaves little cushion if growth wobbles. • | Jordan's best card: Jordan will point to the S&P upgrade to 'BBB+' as proof of quality, but a credit upgrade is a statement about bondholder safety. It says nothing about whether equity holders are overpaying, and net debt of 1.9x EBITDA was never the worry. |
• | The valuation: A free cash flow yield of 3.2% means you collect very little cash for each dollar you put in today. I think that is thin pay for a stock with a beta of 1.21, which tends to fall harder than the market when sentiment turns. |
• | The competitive crack: Cadence launched on-premises AI chip models and split from the Synopsys-OpenAI approach. I would not call that a rival conceding ground, and a 25.3x EV/EBITDA leaves no room for a contested moat. |
| | The Digest ✨ What investors like you are reading. WSJ reports the Fed is expected to hold rates steady this week, as officials urge patience and the midterms loom. Even firmer inflation readings make a surprise hike unlikely. Oil eased as Saudi Arabia, Turkey, Pakistan and Iran agreed to keep talking, Reuters reports. October's record shipping attacks near Hormuz still keep Brent near six-month highs. Reuters reports European shares fell Tuesday as HSBC ($HSBA) earnings disappointed and dragged banks lower. Unrest in France also kept investors cautious. |
| | ➡️ Follow Our Trading Strategy |  | • | What arrives: The full Defence Portfolio every week, with the entry we paid and a live call on every name we hold. |
| | Situational Awareness US • | Bond rally stalls: The 10-year Treasury note is trading at yields south of 5% after a sharp October rally that has since paused. ( Barrons) |
• | Private-equity debt wall: Software firms account for about a third of the roughly $300 billion in risky corporate loans due in 2028 and 2029. ( WSJ) |
• | Anthropic IPO debate: Fortune frames Anthropic's expected 2026 debut as a referendum on AI, with views ranging from a good buy to "the most ridiculous IPO of 2026." ( Fortune) |
• | Meta's AI funding: Meta Platforms ($META) is looking to raise $95 billion to fund its AI infrastructure buildout. ( CNBC) |
• | Celestica earnings surge: Celestica ($CLS) shares jumped over 16% premarket after it beat third-quarter fiscal 2026 expectations and raised its full-year guidance. ( Benzinga) |
World • | Trend-following fund losses: Trend-following hedge funds suffered their worst week since 2024 as a sharp tech selloff caught systematic strategies on the wrong side of crowded positions. ( Hedgeweek) |
• | Goldman cuts Kospi: Goldman Sachs ($GS) strategist Tim Moe slashed his Kospi target by 25% as investors pay a lower growth multiple for AI stocks and volatility rises. ( Market Watch) |
• | Brazil shock rattles: A shock in Brazil sent stocks plunging at the open, while neocloud shares took another hit. ( CNBC) |
• | Iveco takeover progress: A majority of Iveco ($IVG) shareholders tendered their shares to Tata Motors ($TTM), whose offer values the Italian manufacturer at around $4.36 billion. ( WSJ) |
| | Today's Agenda (ET) | Spain: Unemployment Rate (Q3) est. 9.9%, prev 9.87% |
| US: Durable Goods Orders MoM (Sep) est. 1.5%, prev 0% |
| US: Durable Goods Orders Ex Transp MoM (Sep) est. 0.6%, prev 0.3% |
| US: Durable Goods Orders Ex Defense MoM (Sep) est. 0%, prev 0.1% |
| US: S&P/Case-Shiller Home Price YoY (Aug) est. 2.5%, prev 2.5% |
| US: New Home Sales MoM (Sep) est. -3.5%, prev 6.4% |
| US: New Home Sales (Sep) est. 0.65M, prev 0.684M |
| US: CB Consumer Confidence (Oct) est. 81, prev 81.9 |
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