10 Stocks to Watch as the Rotation Builds
Mag 7 names are being sold — and that is good news for the rest of the market.
We’re Trimming Our Alphabet Price Target and Asking This Big Question
After last night’s earnings and cloud details, we must ask if GOOGL shares will be higher one year from now or not….
From The Street of Dreams
$CVNA: Morgan Stanley analyst Andrew Percoco is moving Carvana to the analyst’s Top Pick following a “strong” Q3 print, telling investors that the decision to move the stock to Top Pick is “driven less by near-term estimate revisions and more by increased conviction in the model’s ability to compound profits through macro volatility.” The firm maintains an $88 price target and Overweight rating on Carvana shares.
CVNA:UBS raised the firm’s price target on Carvana to $84 from $83 and keeps a Buy rating on the shares.
CVNA: Needham lowered the firm’s price target on Carvana to $100 from $120 and keeps a Buy rating on the shares. Following the company’s Q3 results, the stock continues to screen as a compelling large-cap growth story, trading at an untaxing multiple against durable share gains driving unit and earnings growth ,though the firm’s reduced price target reflects a lower assumed earnings multiple due to higher prevailing interest rates, the analyst tells investors in a research note.
CVNA:BTIG lowered the firm’s price target on Carvana to $82 from $87 and keeps a Buy rating on the shares. The company reported a sound beat across all major metrics, but expenses were a bit heavier than expected across vehicle operations, overhead, and advertising, leading to a modest adjusted EBITDA beat of $800M vs. $791M expected, the analyst tells investors in a research note.
CVNA:BofA analyst Michael McGovern raised the firm’s price target on Carvana to $72 from $70 and keeps a Neutral rating on the shares. Carvana is executing well in a mixed macro backdrop, with improving reconditioning efficiency making up for the margin headwinds around financing and ad spend growth, the analyst tells investors in a post-earnings note.
$GOOGL: Morgan Stanley analyst Brian Nowak lowered the firm’s price target on Alphabet to $375 from $400 and keeps an Overweight rating on the shares. Alphabet is “not an expensive stock,” but Search innovation and faster growth are key to ar re-rating, the analyst tells investors in a post-earnings note.
GOOGL: Cantor Fitzgerald analyst Deepak Mathivanan lowered the firm’s price target on Alphabet to $350 from $420 and keeps an Overweight rating on the shares. Alphabet’s Q3 results missed key metrics, with EBIT 7% below estimates and Search growth slowing, driving a 10% after-hours share decline, but Cloud growth above 100%, record Search queries, strong TPU demand and continued Gemini innovation support its AI positioning and long-term upside, the analyst tells investors in a research note.The firm recommends buying shares on weakness.
GOOGL: Goldman Sachs analyst Eric Sheridan lowered the firm’s price target on Alphabet to $385 from $435 and keeps a Buy rating on the shares. Alphabet’s Q3 Search revenue missed expectations amid FX and tougher comparisons, while Cloud growth of 103% and a $561B backlog underscored strong demand constrained by compute capacity, the analyst tells investors in a research note. Agentic AI offers new growth opportunities but sharply rising capex of $203B in 2026 and an estimated $350B in 2027 pressures free cash flow, the firm says.
GOOGL: UBS lowered the firm’s price target on Alphabet to $332 from $380 and keeps a Neutral rating on the shares. Google missed Search and YouTube estimates, signaled more measured AI monetization, and saw Cloud margins stagnate despite rising TPU sales, raising concerns that over $100B in TPU revenue in 2027 could pressure EPS and free cash flow expectations, the analyst tells investors in a research note.
GOOGL: JPMorgan analyst Doug Anmuth lowered the firm’s price target on Alphabet (GOOG) to $375 from $425 and keeps an Overweight rating on the shares. The stock’s post-earnings selloff shows the margin for error when a hyperscaler spending hundreds of billions on the AI infrastructure buildout and flipping to negative free cash flow posts disappointing results, the analyst tells investors in a research note. JPMorgan points out that Google faced a tough search compare in Q3 and that management indicated currency was the single largest driver of the deceleration. The firm believes Google’s search headwinds “are more navigable than permanently structural.”
GOOGL: BofA analyst Justin Post lowered the firm’s price target on Alphabet to $380 from $430 and keeps a Buy rating on the shares after a Q3 revenue and EPS miss. Following the report, the firm raised its 2027 revenue estimate for the Cloud beat, additional TPU sales in its model and client facing SpaceX capacity additions in Q4, offset by lower Search, YouTube and subscription estimates. For 2027, BofA raised net revenue by 11% to $616B and lowered its EPS view by 1% to $14.87.
Note: I have previously sold my CVNA puts (for a nice profit)
Positions: Short CVNA VVS
NOW Down, EBAY Up: Upside, Downside Movers in the Morning
Upside
– $GKOS +16% (record Q3 sales and a large FY revenue-guidance raise topped expectations)
– $INSM +14% (BRINSUPRI revenue grew 29% sequentially and guidance was raised for both BRINSUPRI and ARIKAYCE)
– $NCLH +12% (Q3 results topped guidance and the FY EBITDA and EPS outlooks were raised)
– $CVNA +8.4% (large Q3 revenue beat and accelerating retail-unit growth outweighed an EPS miss)
– $CMG +8.3% (Q3 comparable sales beat expectations despite a modest profit miss)
– $DASH +6.9% (record GOV, revenue and net income alongside an agreed $17B acquisition of CART)
– $LITE +6.9% (MRVL is reportedly in advanced acquisition talks, with a deal potentially announced next week)
– $EBAY +6.1% (Q3 revenue and GMV growth accelerated, reinforcing improving marketplace momentum)
– $HII +5.6% (record Q3 revenue, $32.4B of contract awards and higher FY shipbuilding-revenue guidance)
– $LLY +5.1% (annual revenue guidance topped expectations)
– $NVS +3.2% (2026 core operating-income guidance was raised despite a drug-trial write-down)
– $RCL +3.5%, CCL +3.0% (cruise names rise after NCLH beat and raised its FY outlook)
– $MSFT +1.1% (strong cash flow and cloud guidance signaled better returns from heavy AI investment)
Downside
– FTNT -27% (headline beat and raised guidance failed to offset sharply slowing product growth and concerns the refresh cycle is fading)
– NOW -19% (strong topline results were overshadowed by softer forward cRPO expectations and unfavorable renewal phasing)
– HLN -14% (Q3 organic sales missed and FY organic-growth guidance was cut to around 2.5%)
– OSK -13% (quarter missed and FY revenue and EPS guidance were cut as fire-truck production problems persisted)
– MRVL -12% (reported talks to acquire LITE sparked concerns over deal cost and execution risk)
– $CAT -11% (quarter beat, but the margin outlook and durability of AI-infrastructure demand fell short of elevated expectations)
– $GOOGL -11% (Q3 profit and revenue missed as softer search advertising and surging AI spending intensified cash-burn concerns)
– $EGO -10% (2026 gold-production guidance was cut and cost outlooks were raised amid a slower Skouries ramp)
– $CTSH -10% (Q3 beat, but the FY revenue-growth outlook narrowed and Q4 growth guidance disappointed)
– $SCI -8.9% (Q3 earnings missed and guidance was cut)
– $ZS -7.1%, $OKTA -7.5%, $PANW -6.8%, $RBRK -6.8%, $CRWD -6.8%, $SAIL -8.0% (cybersecurity names fall on FTNT’s product-growth slowdown and refresh-cycle concerns)
– $NBIS -6.7%, $CRWV -6.4%, $STRL -6.6% (AI-infrastructure names retreat as $GOOGL’s spending surge renews concerns about monetization and cash returns)
– $HUBS -6.5%, $TEAM -6.9%, $CRM -5.8%, $TYL -5.8%, $WDAY -6.1% (enterprise-software names weaken after NOW’s forward cRPO and renewal outlook disappointed)
Understanding My Trading Moves
The following posts (in case you left early on Wednesday!) helps to explain why I got shorter (on strength yesterday) — remember I covered my index shorts on the whoosh lower at around 11 p.m. last night to take a quick profit!
PPS
Bookings shrunk and backlog did not grow!
The after-market move in Microsoft ($MSFT) reminds me of the up move Meta ($META) had based on the print and earnings per share, before the market figured out the internals — and then hammered the stock.
Obviously Google ($GOOGL) wet the bed too:
https://www.zerohedge.com/markets/msft-rises-azure-beat-bookings-shrink-and-backlog-stalls
Position: None
BY Doug Kass · Oct 28, 2026, 4:55 PM EDT
Market Postscript
* Here are my thoughts following the plethora of EPS releases after the close…
With Google’s ($GOOGL) miss (the deceleration in its core business was unanticipated by every panelist on “the show”), Meta’s ($META) continued awful share price action, Nvidia’s ($NVDA) price rollover threatening chart support, Amazon’s ($AMZN) lackluster share price action (and underperformance) and some possible toppiness in Apple’s ($AAPL) share price, we are left with one… Microsoft ($MSFT).
Meanwhile, ServiceNow’s ($NOW) disappointing results (the company cut subscription revenues for the full year) will likely weigh heavily on software stocks (which were market leaders) tomorrow morning.
I remain independent in view.
As I said in response to subscriber jryan, most stocks do not meet my standards to buy and I won’t change my process or discipline — even if Perma Bulls Tom Lee and Dan Ives (confidently) see clear skies ahead…
The S&P Short Range Oscillator registered 1.84% (more overbought than the prior day) and I ended the day with a large short position in SPY
.
Position: Short SPY (L)
BY Doug Kass · Oct 28, 2026, 4:51 PM EDT
Now Large-Sized on SPY Short
I have moved to large-sized SPY short at $774.19.
Position: Short SPY (L)
BY Doug Kass · Oct 28, 2026, 4:11 PM EDT
Adding to Shorts
Bonds down, crude oil up.
I am adding to shorts.
Position: Short SPY (M)
BY Doug Kass · Oct 28, 2026, 12:00 PM EDT
Positions: None
Microsoft Stuns, Google Sinks, Oracle Offers Hope: 8 Key Items Shaping the Stock Market Thursday
Marvell’s potential Lumentum bid, Samsung’s comments on chip capacity, and other headlines are moving the market this morning.
Microsoft Up, Alphabet Down: Same Growth, Different Outcomes
Microsoft is rewarded for trimming its spending plans. Alphabet is hit on profitability, and it may be its worst earnings reaction ever.
Alphabet Miss, Why Fed Shouldn’t Raise Rates, All Eyes on Amazon
Higher statistical growth coupled with accelerating statistical inflation seems like a good reason to raise rates. I’ll explain why it’s not.
Google’s Investors’ Guard Dropped in Recent Months
* Bona fide business threats had emerged but were ignored as passive and relentless buying of Google’s shares masked a growing AI headwind
* Is Amazon as vulnerable as Google?
Google ($GOOGL) is not only an example that the threat to its search business is real…
Price Is Not Truth
… But it is also testimony to the threat represented by market structure.
What do I mean by that? Let me explain…
Well, passive price momentum-based products and strategies carried Google’s shares ever higher in recent months — and the blind monkeys in the business media (without any or with limited analytical rigor), confidently took the price increases as a sign of fundamental progress. Indeed Google became the darling of the hyperscalers based principally on chart gazing.
Here is perennial bull Gene Munster voicing his concerns:
This gets me back to Amazon ($AMZN).
What has kept me from buying AMZN at seemingly an attractive price-earnings multiple is what has threatened Google. Is the utility of using Amazon markedly reduced as AI/Personal Bots expand their tasks?
Again from Gene Munster:
Finally, about two years ago we observed the dramatic change in the hyperscaler from capital light to capital intensive — suggesting that this was not market friendly and that it was price-earnings multiple altering/contracting:
Position: None
The Fed Holds, Oracle Jumps, Chips Rise for Fourth Session but Alphabet Sinks After Hours
The Fed held rates steady with two hawkish dissents, Oracle’s aggressive long-term targets lifted AI names, but Alphabet fell about 9% after missing expectations.