Jim Lebenthal

The market is telling investors to get in, as it is near all-time highs and stocks that should be doing poorly are performing well, indicating underlying strength and a bullish outlook.

The speaker bought eBay as a way to play the discretionary consumer sector, believing it benefits from both luxury and secondhand/refurbished goods markets. He highlighted collectibles as a major, underappreciated growth channel and noted the stock trades cheaply (low teens forward P/E), has very little debt, good free cash flow, and aggressively shrinks its share count. If geopolitical tensions ease and oil/gasoline prices decline, discretionary consumer spending should recover. eBay's platform is uniquely positioned to capture spending across the economic spectrum (K-shaped recovery). LONG because it is a growing company at an attractive valuation with multiple catalysts (broad discretionary recovery, niche growth in collectibles, shareholder-friendly capital allocation). A failure to de-escalate in the Middle East, keeping energy prices high and crushing discretionary spending.

Speaker notes WYNN pulled back from 130 to 110 and DAL shares are down despite planes and airports being "packed." The pullback is attributed to the stocks getting "ahead of their skis" (valuation) rather than operational flaws. With low unemployment and wage gains continuing, the long-term trend of consumers seeking experiences remains intact. LONG (Buy the dip on valuation reset). Rising oil prices affecting airlines; persistent consumer slowdown.

Strategic petroleum reserves in the US and globally are at their lowest since 1983 and must be refilled regardless of price, which will support oil prices.

Bought Micron over the past three weeks, building a ~3% position. The upcoming anniversary of the CHIPS Act will allow Micron to start returning capital to shareholders – a fundamental catalyst. He is holding through near-term volatility and believes Micron will do fine over the intermediate to long term.

Even as the rest of the market catches up, semiconductors will continue to perform fabulously. Chips still have strong earnings momentum and remain a standout sector.

AI's benefits are broadening beyond obvious tech winners, now flowing to real estate investment trusts, health insurance, and energy. This breadth is just starting to be appreciated.

AI's benefits are broadening beyond obvious tech winners, now flowing to real estate investment trusts, health insurance, and energy. This breadth is just starting to be appreciated.

Apple's sell-off after the Siri AI unveiling is a consolidation, not something worse. Valuation at 32x forward earnings is a bit stretched, but the defined low-capex strategy, strong economic growth, and profit growth make this a buying opportunity in the coming days.

Added to Nike after earnings, as the market's rally on potentially bad news indicates a buying opportunity and signals to get invested.

Added meaningfully to BlackRock because he feels good about the market and doesn't think things are worrisome, indicating confidence in further gains.

Farmer stated "CISCO SYSTEMS CONTINUES TO OUTPERFORM." This indicates that Cisco has demonstrated strong performance and is expected to sustain this trend. LONG due to the expectation of continued outperformance based on historical strength. A reversal in performance drivers or deterioration in market conditions for networking equipment.

Lebenthal calls Citigroup the "easy button," citing its valuation (trades at book value), profitability improvements, a ~2.5% dividend yield, and the pending Banamex Mexico IPO/spin-off as the "final piece of the puzzle." CEO Jane Fraser's restructuring is bearing fruit, and the removal of the Banamex overhang will simplify the story. The stock's discount to book value offers a margin of safety. A straightforward value play with multiple near-term catalysts (profitability, divestiture) that should lead to a re-rating. A broader economic slowdown impacting credit quality could offset operational improvements.

Lebenthal states Microsoft is a "great company" and at ~22x forward earnings with >20% growth (PEG <1), it's a "steal." He explicitly says, "this is a price that I think two years from now I'm going to look back and say man that was a steal" and that he is loading up. The recent downdraft is attributed to general market selling (QQQ/SPY outflows), not company-specific news. Its RSI is at multi-year lows (~36), indicating extreme technical weakness. The combination of a low valuation metric (PEG) for a dominant, profitable franchise in AI (Azure, OpenAI) and a washed-out technical setup presents a high-conviction long opportunity. The stock could become more oversold (RSI 25) if market sentiment on tech/AI spending worsens further.

Lebenthal describes Oracle as a "coiled spring" for AI believers, down ~50% from highs. He acknowledges the market doubts OpenAI can pay its large contract with Oracle but argues "they just have to be good for some of it." OpenAI's recent massive fundraising ($110B) and incoming customer contracts provide credibility that at least partial payment will flow through to Oracle's earnings, which the market is not pricing in. The extreme sell-off on OpenAI solvency fears is overdone, creating a high-risk/high-reward long opportunity if AI spending remains robust. OpenAI faces financial or operational difficulties, jeopardizing its contract payments to Oracle.