Stocks Hit by AI & War Jitters | The Close 7/23/2026

Watch on YouTube ↗  |  July 23, 2026 at 21:59  |  1:29:38  |  Bloomberg Markets
Speakers
Michael Contopoulos — Director of Fixed Income, Richard Bernstein Advisors
Lloyd Walmsley — Senior Equity Research Analyst, Mizuho Securities
Nelson Yu — Head of Equities, AllianceBernstein
Jay Goldberg — CEO, Seaport Global
Sree Taylor — Reporter, Bloomberg
Carol Carlson — Reporter
Arvind Krishna — CEO of IBM
Atsi Sheth — Chief Credit Officer, Moody's
Matt Harvey — Economic Analyst
Jana Eggers — General Manager AI & Edge, OMNI Federal
Mickey Drexler — Former CEO, Gap Inc. / J.Crew
Katie Greifeld — Anchor, Bloomberg
Ed Ludlow — Co-Host, Bloomberg Technology

Summary

The episode covers a broad market selloff led by AI capex fears and surging oil prices above $100. Guests debate whether AI spending will generate returns, with some warning of a dot-com-like overbuild and others seeing tangible ROI. Key single-stock calls include bullish views on Alphabet and IBM, bearish views on Tesla and American Airlines, and a bullish call on semiconductor equipment following Intel's strong beat. Bonds and quality factor rotations also emerge as notable themes.

  • S&P 500 and Nasdaq fell sharply amid Alphabet and Tesla earnings misses and AI capex scrutiny.
  • Brent crude surged above $100/bbl, pushing 10-year Treasury yields to multi-month highs.
  • Janus Henderson's Mike Contopoulos sees AI spending as unsustainable and expects a sustained selloff with higher rates.
  • Mizuho's Lloyd Walmsley defended Alphabet on accelerating cloud growth and solid AI demand.
  • AllianceBernstein's Nelson Yu advocated rotating into quality productivity enablers and sees bond yields falling.
  • Intel crushed earnings and Capex plans, leading Seaport's Jay Goldberg to call it great for semiconductor equipment suppliers.
  • IBM's CEO highlighted a strong mainframe upgrade cycle, while American Airlines and Tesla were flagged as shorts on operational and capex headwinds.
Ideas
Michael Contopoulos Director of Fixed Income, Richard Bernstein Advisors 2:39
Short S&P 500 on AI capex overspend
The AI capex boom resembles the late-1990s internet buildout, with massive spending on data centers and infrastructure assuming peak innovation, while utilization is unknown and returns may not justify the investment. The market is only starting to price this risk, and the current selloff could be more sustainable.
SPY MED
Michael Contopoulos Director of Fixed Income, Richard Bernstein Advisors 6:34
Short bonds, rates heading higher
Rates are likely to go up, not down, supported by oil prices above $100, jobless claims at 1960s lows, earnings growth near 20%, credit spreads at all-time tights, and inflation nowhere near target. The 10-year yield is much more likely to hit 5% than a sustained 3% handle, and the Fed will likely hike this year.
US 10-Year Treasury Bond HIGH
Lloyd Walmsley Senior Equity Research Analyst, Mizuho Securities 17:23
Buy Alphabet on cloud acceleration
Alphabet's cloud business accelerated massively (82% growth vs consensus 65%), margins improved, and there is clear evidence of healthy ROI on AI spend. The search business slowdown is mild, and the broader macro-driven selloff creates a buying opportunity as AI demand remains very strong and enterprise adoption is still early.
GOOGL HIGH
Sree Taylor Reporter, Bloomberg 31:47
Short American Airlines on weak profitability
American Airlines has been struggling with profitability for years, is late to the premium revenue game, faces fuel cost headwinds, and just cut guidance for the second time this year. Operational missteps and labor issues continue to weigh on the stock.
AAL MED
Nelson Yu Head of Equities, AllianceBernstein 37:50
Buy quality productivity enabler sectors
Quality investing has underperformed but offers opportunity as the market broadens. Companies with durable returns above their cost of capital will benefit in a higher cost-of-capital environment. Productivity enablers such as industrial automation, specialized manufacturing, health care, and capital markets offer the best quality and growth opportunities outside of crowded tech and semiconductors.
XLV Specialized Manufacturing Sector Industrial Automation Sector Capital Markets Sector MED
Jay Goldberg CEO, Seaport Global 58:39
Buy semi equipment on Intel capex
Intel's strong results and capex increase are fantastic news for the semiconductor capital equipment supply chain. Intel had been a lagging customer in recent years; its renewed spending, combined with memory suppliers globally expanding, creates a powerful demand tailwind for equipment makers.
SMH HIGH
Arvind Krishna CEO of IBM 71:05
Buy IBM, mainframe upgrade cycle strong
IBM's Z17 mainframe has delivered 130% capacity growth versus the prior generation, with 85% of clients increasing their capacity. Strong client commitment and unit cost advantages support durable revenue and cash flow growth, reinforcing the long-term thesis for IBM.
IBM MED
Carol Carlson Reporter 74:13
Short Tesla on capex and slow AI progress
Tesla's capex is rising sharply, profits missed expectations, and investors are frustrated by the slow progress on robotaxis and humanoid robots. The car business focus is fading, and without concrete milestones in AI-related projects, the stock remains under pressure.
TSLA MED
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This Bloomberg Markets video, published July 23, 2026, features Michael Contopoulos, Lloyd Walmsley, Sree Taylor, Nelson Yu, Jay Goldberg, Arvind Krishna, Carol Carlson discussing SPY, US 10-Year Treasury Bond, GOOGL, AAL, XLV, Specialized Manufacturing Sector, Industrial Automation Sector, Capital Markets Sector, SMH, IBM, TSLA. 8 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Michael Contopoulos, Lloyd Walmsley, Sree Taylor, Nelson Yu, Jay Goldberg, Arvind Krishna, Carol Carlson  · Tickers: SPY, US 10-Year Treasury Bond, GOOGL, AAL, XLV, Specialized Manufacturing Sector, Industrial Automation Sector, Capital Markets Sector, SMH, IBM, TSLA