Ideas
Small caps face rates and AI risks
Dan cautions small caps are tricky: higher rates hurt the lower-quality cohort, the Russell 2000 suffers negative selection because many $100M-plus revenue companies stay private, about 40% of the index is unprofitable, and AI can both disintermediate small-cap industries and leave those companies unable to invest in AI adoption.
Nvidia and Dell benefit from recurring spending
Josh argues building data centers embeds guaranteed purchases of servers and chips, and because GPUs are not 20-year assets, existing infrastructure must constantly be fed with new technology; Nvidia and Dell are direct beneficiaries even if new construction slows.
Microsoft benefits from ending OpenAI exclusivity
Josh thinks Microsoft's rally reflects the public split with Sam Altman and the end of OpenAI exclusivity; he believes Microsoft can use cheaper open-weight models to fulfill AI software product commitments and regain momentum.
GLP-1 headwind hurts PepsiCo food demand
Dan argues GLP-1 adoption is real and is pressuring food staples; Pepsi and Frito-Lay have missed organic revenue growth targets for two to three years, and investors should not read McDonald's results as a broad consumer signal.
Overweight US equities on resilient earnings
Dan says the asset allocation committee has been overweight US equities for well over a year and is sticking with that view because the economy remains resilient and earnings growth is accelerating; he pairs this with diversified asset classes but still favors US stocks.
KOSPI too concentrated; be selective EM
Dan notes KOSPI did not have the offsetting healthcare and financials rotation that cushioned the US when AI sold off, because it is highly concentrated in semiconductor-related stocks; he tells investors to be selective in emerging markets.
Semis more interesting after June pullback
Dan warns the AI hardware complex could face deployment constraints and double-ordering as companies order servers, chips, and electrical components ahead of 40-50 gigawatts of projected data center construction; the risk is not today but could appear a year from now, similar to fiber boom-bust dynamics.
Healthcare wins from AI drug discovery
Dan likes healthcare as an AI adoption beneficiary: AI can compress phase one drug discovery from six-to-seven years to under twelve months, bringing safer drugs to market faster, and downstream life-science tools, consumables, labs, and clinical trial managers should benefit after years of COVID, rate, and capital-allocation headwinds.
Software oversold; AI creates interdependence
Dan says software was oversold in mid-February as investors priced in AI obsolescence, but AI labs are more likely to create chronic interdependence with software than to put corporate America out of business; he expects dispersion and favors quality software names.
Palo Alto valuation stretched at 70x
Dan says Palo Alto Networks is an AI winner but had rerated to 70 times earnings, the top end of its PE range, making it a high-tracking-error winner in a 50-stock portfolio, so the team sold it.
Uber is misunderstood and bullish
Josh says he personally believes the market is wrong on Uber and has been long the stock; he sees it as misunderstood even though the episode does not provide a detailed supporting thesis.
S&P Global ratings business is underappreciated
Dan contends S&P Global is a datacentric business caught in the AI-obsolescence selloff that has not fully rebounded; its issuance and data businesses are underappreciated because massive financing requires regulated ratings.
Nasdaq data and IPO upside underappreciated
Dan argues Nasdaq is misunderstood because it combines an exchange, a fintech business, and a data business that feed each other; earnings grow mid-to-high teens while the multiple stays flat, and it should benefit from future IPOs and AI data utilization.
Momentum and quality factors back in favor
Dan says the market's microstructure—quant funds, CTAs, retail liquidity, and speed of information—has made momentum one of the most important factors, and quality is also coming back in favor as higher rates and AI adoption reward stronger companies.
Buy energy dips on short-lived ceasefires
Dan says his team has been buying energy on every ceasefire because ceasefire deals have been short-lived; energy names are also now more focused on dividends and buybacks after the 2015 shale bust, giving them a better capital-return profile.
Mag 7 quality may lead again
Dan expects 2027 could look like 2023 with a return to monolithic Mag 7 outperformance because the average company will struggle to comp the synthetic tariff-related operating leverage; he favors bigger-is-better quality and AI enablers.
This The Compound News video, published September 04, 2026,
features Dan Skelly, Josh Brown
discussing IWM, NVDA, DELL, MSFT, PEP, SPY, EWY, SMH, XLV, IGV, PANW, UBER, SPGI, NDAQ, MTUM, Quality Factor, XLE, MAGS.
16 trade ideas extracted by AI with direction and confidence scoring.
Speakers:
Dan Skelly,
Josh Brown
· Tickers:
IWM,
NVDA,
DELL,
MSFT,
PEP,
SPY,
EWY,
SMH,
XLV,
IGV,
PANW,
UBER,
SPGI,
NDAQ,
MTUM,
Quality Factor,
XLE,
MAGS
