Swipe fee legislation gives me hesitation for Visa and Mastercard, says MAI Capital's Chris Grisanti
Speakers
Chris Grisanti
— Chief Market Strategist, MAI Capital Management
Summary
Chris Grisanti of MAI Capital Management joins The Exchange to discuss policy risk, market valuations, and stock picks. He says the U.S. economy is strong but valuations are the main issue, and he is hesitant on Visa and Mastercard because of swipe-fee legislation. He favors Dell as a data-center server play and UPS as a contrarian turnaround with a safe dividend.
- Chris Grisanti says the U.S. economy is in a strong place, with valuations as the bigger market problem.
- He sees populist policy moves as sector-specific landmines, with swipe-fee legislation pressuring Visa and Mastercard.
- He advises waiting for clarity before buying Visa or Mastercard due to swipe-fee risk.
- He likes Dell because data-center server demand and hyperscaler spending should continue.
- He sees the AI data-center cycle as early-to-mid innings despite longer-term bubble concerns.
- He favors UPS as a contrarian turnaround with recovering earnings, a strong balance sheet, and a 6% dividend.
Ideas
Swipe-fee risk makes Visa, Mastercard unattractive
Visa and Mastercard are not cheap, and the swipe-fee legislation is a direct threat to their core interchange revenue, which he calls the geese laying the golden eggs. The 10% cap is less important, but the populist surge could get enough Senate Republican support, so he sees more risk than the market thinks and would not buy the stocks today, preferring to wait for clarity.
Dell wins as data-center server demand persists
He likes Dell because data centers are a huge growth driver and Dell is the largest provider of servers into them; hyperscalers like Microsoft, Amazon, and Google are well-capitalized and will keep spending to avoid falling behind. AI data-center spending should continue into 2026, and although he sees a bubble building longer term, he thinks the cycle is only in the fifth or sixth inning, not the eighth.
UPS is cheap, safe dividend, earnings recovering
He likes UPS as a contrarian 'gag factor' idea: the stock is down more than 50% from its highs, the Amazon relationship is now yesterday's news after two years of weaning, earnings are finally starting to come through, and it is one of the few inexpensive stocks with a great balance sheet. Investors get paid a safe 6% dividend while waiting for the turnaround.
