Ideas
Small caps outperform on Fed rate cuts.
Small caps are the biggest beneficiaries of Fed rate cuts because they carry more leverage and operating leverage. Russell 2000 2026 earnings growth is expected at 37% versus 14% for the S&P 500, with lower multiples and further benefit from lower debt-servicing costs; managers under benchmark will be forced to buy them.
Durable bull market; buy the dips.
Hayes remains long equities, viewing the market as in the second leg of a durable bull market that can run into the early 2030s. He expects any 2025 pullbacks to be contained around 3-8% rather than 10-20%, says 20% corrections should be bought not sold, and argues many investors are offsides expecting seasonal weakness, making further strength the pain trade.
Short-squeeze laggards outperform as funds chase.
Hedge funds and institutions are far behind benchmarks after missing the post-Liberation Day recovery, so they must buy laggards and most-shorted/most-hated stocks with leverage to catch up. This has already driven the most shorted stocks to outperform the S&P 500 by 11% in seven to eight weeks, and Hayes expects the theme to continue.
Avoid Mag7; priced for perfection.
Mag7 earnings growth is decelerating from 33% last year to 14% this quarter and below 10% by Q3, while multiples have not compressed. Microsoft and Amazon illustrate the disconnect—great businesses but priced for perfection, so even a small execution miss could trigger a severe drawdown. Hayes wants to avoid these super high-flying names.
Buy S&P 500 ex-Mag7 laggards.
Managers under benchmark have no choice but to buy the 'unmagnificent 493'—S&P 500 stocks outside the Magnificent Seven—because they cannot chase already-up Mag7 leaders. These laggards offer higher expected growth at lower valuations and should attract forced buying.
Value beats growth over long term.
Over long periods, small-cap value and value generally outperform growth; the past decade's growth dominance was skewed by 15 years of ZIRP. Unless investors bet on ZIRP returning, small-cap value and value are better long-term allocations, with value beating growth by about 4% compounded annually over 100 years.
AI adopters have unpriced margin upside.
The key AI beneficiaries are companies that implement the technology, not the creators, because the productivity, efficiency, and margin expansion from AI adoption are not yet priced in. Hayes wants to own great businesses that can become greater through AI adoption.
AI data centers drive energy demand.
Hayes likes energy as a simple exposure to the AI infrastructure theme because data centers require continual and growing energy demand. He names Comstock Resources and Generac as specific energy-related plays benefiting from this backdrop.
Buy Comstock; target $50 in 2-3 years.
Comstock Resources is a holding Hayes is buying more of around $17. Jerry Jones owns over 70% and Hayes is a co-investor; the stock previously traded from $8 to $30 and he targets $50 in two to three years on continued energy demand.
Generac target $250-300 on data centers.
Generac is a huge winner for Hayes, bought below $100 and now near $200. Data center buildouts require generators, and he expects the stock to reach $250-300+, calling it another energy play.
Intel turnaround; downside protected, $100 target.
Intel is Hayes's dark-horse turnaround: the only US game in town for chip production, with government support for reshoring and a proven turnaround CEO in Lip-Bu Tan. Downside is protected by liquidation and legacy value around $40-50, while successful production could drive the stock to $100, offering asymmetric risk/reward.
Reshoring is durable US manufacturing theme.
Reshoring and a US manufacturing resurgence are durable themes, supported by government deregulation and the adoption of AI and robotics to offset high labor costs. Hayes favors companies benefiting from the revitalization of domestic manufacturing and critical supply chains.
GXO automation drives margin expansion.
GXO Logistics is a holding that benefits from warehouse automation and humanoid robots. As one of the world's largest logistics and warehousing providers, it can expand margins, gain scale, and squeeze competitors by implementing AI/robotics, rather than Hayes having to guess which technology creator wins.
This The David Lin Report video, published August 07, 2025,
features Thomas Hayes
discussing IWM, SPY, Most shorted stocks, MAGS, Unmagnificent 493, AVUV, Value stocks, AI-SECTOR, XLE, CRK, GNRC, INTC, RSHR, US manufacturing, GXO.
13 trade ideas extracted by AI with direction and confidence scoring.
Speakers:
Thomas Hayes
· Tickers:
IWM,
SPY,
Most shorted stocks,
MAGS,
Unmagnificent 493,
AVUV,
Value stocks,
AI-SECTOR,
XLE,
CRK,
GNRC,
INTC,
RSHR,
US manufacturing,
GXO
