June Monthly Roundup: The Market Stumbled in June. The Portfolio Didn’t.

June was a challenging month for the market as both the S&P 500 and the Nasdaq lost ground. On a positive note, however, the Pro Portfolio gained in June, extending our lead over the S&P 500 for Q2 2026 and on a year-to-date basis. We’ll review the puts and takes behind that in “Catching Up With the Portfolio” below, but as we move into the second half of the year, let’s discuss what’s on our radar. 

Context is everything, and with that in mind, let’s briefly review some of the dynamics that shaped Q2 2026. That begins with the U.S.-Iran war, the significant climb in oil and petrochemical prices, and the closure of the Strait of Hormuz. That accelerated the uplift in inflation pressures, with companies responding in kind, which has since flowed through to the inflation data through May. 

That raised concerns about consumer spending, especially with declines in the savings rate, and shifted the market to expecting two 25-basis point rate hikes by the Fed between now and Q1 2027. Mortgage rates rose, and homebuilders needed to use more incentives to move houses as demand softened. 

AI adoption continued to climb, and usage expanded, leading to hyperscalers lifting their capital spending, which was a very powerful tailwind for multiple holdings in the Portfolio. Given the composition of the S&P 500 and the Nasdaq Composite, that and growing hopes for a deal between the U.S. and Iran led the S&P 500 to hit a record high in early June. 

At the same time, memory capacity became a greater pain point, so much so that Apple (AAPL), Microsoft (MSFT) and others announced hardware price increases. And the S&P 500’s record high raised questions about the market multiple and consensus EPS expectations for that market barometer. 

More recently, we’ve seen further progress on U.S. and Iran peace talks, oil has fallen and is approaching pre-war levels, and inflation data has started to improve. We expect more of that to come as the ripple effect of falling oil and petrochemical prices moves through the system. 

Meanwhile, indications are that hyperscaler capacity is tight, and that suggests we could see another lift in capital spending expectations for this year, as well as another leg up in 2027. The driving force behind that is captured in the signals we shared with you during Q2 2026 and continue to collect – AI adoption continues and its usage is expanding. 

Turning to the second half of the year, in the coming days Q2 2026 earnings season will be upon us. As it tends to be, it will be a fast and furious time as companies deliver their quarterly results and update their outlooks. We expect the fall in energy prices to be a popular topic as well as the decline in uncertainty associated with the Iran war. 

As we tally those reports, we’ll listen to management comments and tie them back to the Portfolio’s holdings. We will be listening intently for comments about AI deployment, productivity gains, usage and spending plans. We will need to do a few other things as well. 

One of them is to continue to follow the peace talks as well as chew through upcoming economic data to measure the health of the economy and to monitor what’s unfolding with inflation. With the White House expected to rebuild its tariff wall, we could see renewed geopolitical tensions emerge, and that means paying attention to these new tariffs, how they’re structured, and if they are another Trump stick for trade deal conversations. 

Another item of focus will be consensus EPS expectations for the S&P 500 in the coming quarters. The current view calls for year-over year EPS growth of 24% to $340.91, but that hinges on EPS growth re-accelerating in the back half of the year. 

In our view, this makes the upcoming earnings season even more important than usual. Our thinking is that fresh data pointing to the economy remaining on a growth path, disposable income improving as those inflation pressures ease in the coming months, and those energy declines bode well for company margins in the coming quarters, especially those that boosted prices earlier this year. 

That suggests there is cushion for those H2 2026 consensus EPS figures, and we could see some upside surprises. We’ll have a better sense of that over the next few weeks, and the number of earnings pre-announcements is a likely telltale indicator, one that we will be finely attuned to. 

As we navigate what’s to come, the technical setup for the S&P 500 and the Portfolio’s positions will also be under our watchful eye. We’ll be on the lookout for opportunities within the Portfolio and others for the road ahead, but we will also harvest gains when it is prudent to do so. 

Have a wonderful Independence Day holiday weekend. As I mentioned in today’s video, I’ll be in London for the next several days, so our volume of Alerts will be a wee bit less than usual. However, because of our increasingly connected world, we will have our eyes on things, and if any action is needed, we’ll make the necessary moves. See you in a few days.

Catching Up on the Portfolio This Week

While the market had a tough time in June, that wasn’t the case for the Pro Portfolio, as we widened our lead against the S&P 500. Exiting the first half of 2026, the Pro Portfolio was up 12.86% compared to 9.55% for the S&P 500. That outperformance was due to the strong performance for the Portfolio during Q2 2026 of more than 19.5% compared to 14.9% for the S&P 500. 

While we enjoyed notable gains across many of our positions, which we’ll discuss below in the company specific write-ups, the two standouts for June and Q2 2026 were Applied Materials (AMAT) and Marvell Technology (MRVL). United Rentals (URI), the First Trust Nasdaq Cybersecurity ETF (CIBR), Arista Networks (ANET), and Axon Enterprise (AXON) also made significant strides. 

June was also another positive force for the Portfolio’s EPS All-Stars strategy, and that led its return for Q2 2026 to clock in just over 66%. Our moves to reconstitute the basket on June 30 and July upsized the Portfolio’s exposure to ~6% of its assets. The process brought SiTime (SITM) and Seagate Technologies (STX) into the basket. If you’re new to the All-Stars strategy, you can review the “rules and regs”, as we call them, here. 

As part of that reconstitution, we exited Credo Technology (CRDO) with a wonderful gain of 185%, and Hudbay Minerals (HBM), with a far more modest one of just over 11%. Tremendous Q2 2026 performance in Micron (MU), up over 200%, and Bloom Energy (BE), nearly 120%, meant we had to reset their All-Stars exposure on June 30. It was a very profitable move, and one that speaks to the underlying strategy of the basket. 

That wasn’t the only register wringing we did in June. Early in the month, we locked in a 400% win with Marvell shares and a more than a 150% gain on a slug of Morgan Stanley (MS) shares. As the month progressed, indications of a settlement between the U.S. and Iran emerged and the re-opening of the Strait of Hormuz led us to exit the portfolio’s inverse ETF positions.

In the second half of the month, we rang the register on Marvell shares again, locking in an even bigger gain, and a meaningful profit in a slug of Applied Materials shares. As we started July, we took bowed to our portfolio discipline and culled some profits in shares of Axon following their aggregate move over the previous days. 

We deployed capital into two new positions during June, one in Boeing (BA) and the other in Paccar (PCAR). We subsequently scaled into those positions, but have ample room to grow our exposure at the right levels. We also picked up additional shares of Broadcom (AVGO), Netflix (NFLX) and Eaton (ETN) for the Portfolio as well as ones in Palantir (PLTR) and Microsoft (MSFT) toward the end of the month. On June 29, we took advantage of the selloff in the shares of SuRo Capital, which effective July 1 was rebranded as Neostellar Capital (NSLR). 

As we move past the first few trading days of July and get ready for the Q2 2026 earnings season, the Portfolio’s cash position sits at almost 7.5%. We have several companies on our potential shopping list, including Nvidia (NVDA) and some of our newer holdings. We’ll be on the lookout for Boeing’s June deliveries, the heavy truck industry orders for June, Costco’s (COST) June sales report as well as those from Taiwan Semiconductor and Foxconn. At the same time, we will stick to our portfolio discipline when appropriate. 

Videos This Week  

June 29: What’s Behind the Surge in Our Public Safety Name?

June 30: Digging Into the First Part of Our Quarterly EPS All-Stars Reconstitution

July 1: Our Big Tech Holding Wants to Challenge AWS, Azure and Google Cloud

July 2: Palantir Upgrade Draws Connection to Nvidia Valuation

June Signals

Each month, we uncover numerous signals and confirmation points for the Portfolio’s investing strategies, its active positions, and those we’re assessing. Here are some quick links to those findings collected over the last several weeks:

June 6: We’re Tracking 30 Signals Across 9 of Our Pro Portfolio Investing Themes

June 13: Tracking 26 Signals Across 11 of Our Portfolio Investment Themes

June 20: Tracking 21 Signals Across 10 of Our Investing Themes

June 27: 30 Signals Across the Portfolio’s 10 Themes and Strategies

Key Global Economic Readings

Chart of the Week: S&P 500 Market Cap vs. Equal Weighted

June was a good month to see a broadening out of the stock market rally. Though the month did finish in the negative for the State Street SPDR S&P 500 ETF Trust (SPY) the rest of the stock market performed well. The Invesco S&P 500 Equal Weight ETF (RSP) finished positively, up 2.2% versus the SPY which was lower by 1.2%. That is a significant differential that shows up in the strong performance by the Russell 2000 as well (up 3.2% in June).  

We point out these differences as they matter to the bulls if they want to see a market uptrend continue. A narrow-range rally becomes quite vulnerable and could have some damage if the heaviness of sellers overwhelms the few stocks that are rising. We have spoken in the past of these instances and how even a bit of weakness is magnified into a massive drawdown. Think about it being a house of cards.

Fortunately, the current situation is not like this, as the RSP is truly the leader of the pack. Notice the power (black line) of this ETF over just the last few weeks. Now we could argue the Mag 7 names, which heavily weight on the SPY, have started to have more influence, but the jury is out on that call.

If the RSP continues to show leadership and expand other sectors higher during earnings season, then the bullish rally should continue into the summer.

Other charts we shared with you this past week were:

Monday, June 29: S&P 500 – Waiting on a New Quarter

Monday, June 29: American Express (AXP) – Amex Moves From Support to Near Resistance

Tuesday, June 30: Axon Enterprise (AXON) – Axon Gets a Lift From a ‘Known’ Source

Wednesday, July 1: Microsoft (MSFT) – Is That an Uptrend I See in Microsoft?

Thursday, July 2: Ciena (CIEN) – Ciena Is Just Hanging Out 

The Week Ahead

Looking ahead to next week, we’ll be focused on the June inflation data found in the Service PMI reports from ISM and S&P Global, digesting them when they land on Monday. We’ll reflect on their learnings as we read through the Fed’s FOMC policy meeting minutes that will be shared on Wednesday afternoon. We are curious as to how the meeting minutes will be reshaped under new Fed Chair Kevin Warsh following the streamlined policy statement we received last week. 

With the July Service PMI data in hand, and this week’s July Manufacturing PMI reports, we’ll revisit GDP expectations for Q2 2026 and what new order figures say for the start of the current quarter. As it relates to the consumer, when we look at next week’s Consumer Credit report, the change in revolving credit will be what we focus on. Revolving credit, which includes credit-card debt, rose to $1.31 trillion in April from $1.30 trillion in the previous month, indicating continued growth in short-term consumer borrowing. 

Here’s a closer look at the economic data coming at us next week:

U.S.

Monday, July 6

S&P Services PMI (Final) – June (9:45 AM ET)

ISM Services PMI – June (10:00 AM ET)

Tuesday, July 7

LMI Logistics Managers Index – June (6:00 AM ET)

Imports/Exports – May (8:30 AM ET)

RCM/TIPP Economic Optimism Index – July (10:00 AM ET)

Consumer Inflation Expectations – June (11:00 AM ET)

Wednesday, July 8

MBA Mortgage Applications Index – Weekly (7:00 AM ET)

Wholesale Inventories – May (10:00 AM ET)

EIA Crude Oil Inventories – Weekly (10:30 AM ET)

FOMC Meeting Minutes (2P ET)

Consumer Credit Change – May (3 PM ET)

Thursday, July 9

Initial & Continuing Jobless Claims – Weekly (8:30 AM ET)

Existing Home Sales – June (10:00 AM ET)  

EIA Natural Gas Inventories – Weekly (10:30 AM ET)

Friday, July 10

 WASDE Report (12 PM ET)

International

Monday, July 6

UK: New Car Sales – June

Eurozone: Producer Price Index, Retail Sales – May

Tuesday, July 7

Japan: Household Spending, Leading Economic Index – May

Wednesday, July 8

Japan: Eco Watchers Survey – June

Thursday, July 9

China: Inflation Rate, Producer Price Index – June

Japan: Machine tool Orders – June

Friday, July 10

Japan: Producer Price Index – June

We have a handful of companies reporting next week, which will be a soft start to the Q2 2026 earnings season that picks up considerably on July 14 with earnings from Bank of America (BAC), Citigroup (C), Ericsson (ERIC), Goldman Sachs (GS), JPMorgan Chase (JPM) and Wells Fargo (WFC). At that time, we’ll be looking to see what Bank of America has to say about its dividend now that we are past the latest round of Fed bank stress tests. 

When we read through quarterly results from Helen of Troy (HELE), PepsiCo (PEP), and WD-40 (WDFC), what is said about input costs and pricing will be on our minds. Parsing the report from Delta Air Lines (DAL) and its outlook for the back half of the year, we’ll be mindful of its updated view on jet fuel costs and travel demand. We’ll also be scrutinizing what management says about its American Express card portfolio. When Delta reported its Q1 2026 results, it noted that card portfolio continued to deliver double-digit spend growth. 

Here’s a closer look at the earnings reports coming at us next week:

Tuesday, July 7

• Close: Penguin Solutions (PENG)

Wednesday, July 8

• Open: Helen of Troy (HELE)
• Close:   Levi Strauss (LEVI), PriceSmart (PSMT)

Thursday, July 9

• Open: PepsiCo (PEP), Simply Good Foods (SMPL) 
• Close: WD-40 (WDFC)

Friday, July 10

• Open: Delta Air Lines (DAL), Hyatt Hotels (H)

Portfolio Investor Resource Guide

• Economic Data: Here’s a List of Links to the Key Economic Data We Closely Watch
• Investing Terminology: 16 Key Terms Club Members Should Know
• 10-Ks: Want to Know About a Stock? Read the Company’s Reports
• 10-Qs: Unlock the Numbers and Key Information Behind Your Stock With the 10-Q
• Income Statement: Our Cheat Sheet to Understanding This Financial Document
• Balance Sheet, Cash Flow Statements, and Dividends: How to Know If a Company Is Off-Kilter? Read Its Balance Sheet
• Valuation Metrics: Everyone Wants a Value. Here’s How Investors Can Find
• Thematic Investing 101 Webinar
• Like the Benefits of ETFs? Let’s Talk About Models

The Portfolio Ratings System

1 – Buy Now (BN): Stocks that look compelling to buy right now.

2 – Stockpile (SP): Positions we would add to on pullbacks or a successful test of technical support levels.

3 – Holding Pattern (HP): Stocks we are holding as we wait for a fresh catalyst to make our next move.

4 – Sell (S): Positions we intend to exit.

ONES

American Express AXP; $338.25; 700 shares; 3.82%; Sector: Financial Services

UPDATE: June was a strong month for our shares of American Express (AXP), which climbed more than 6% bringing their Q2 2026 move to just shy of 12%. That move confirmed our actions taken on March 2026 and May 2026 to add to the Portfolio’s AXP position. When we made that move in May, we reiterated our $400 price target and upgraded our rating to One. Our price target for American Express has been predicated upon two key factors, which include the expected increase in average fee per card over the coming quarters and the rise in the number of cards in force as the Platinum Card Refresh takes hold. At the Morgan Stanley US Financials Conference in June, CFO Christophe Le Caillec noted that demand for new cards remains “very strong” with spending better than Q1 2026. Le Caillec also expects card fees to increase in the balance of the year, hitting a high-teens growth rate. More cards at a higher average card fee means a nice step up in net card fees, which drives more than 70% of Amex’s pretax income. Amex management tipped that roughly one-fourth of the overall U.S. consumer Platinum Card portfolio has been billed at the new annual fee. We see that supporting the average fee per card trending higher in the coming quarters. We will continue to monitor consumer spending, which should improve as the flow through of falling oil prices is felt. We will also focus on management comments about the Platinum Card refresh and other card launches. 

June Price Change: 6.9%; Yield: 1.1%

INVESTMENT THESIS: American Express is a globally integrated, membership-driven payments company, providing customers with access to products, insights, and experiences that enrich lives and build business success. The company has four reportable operating segments: U.S. Consumer Services (USCS), Commercial Services (CS), International Card Services (ICS), and Global Merchant and Network Services (GMNS). American Express targets the premium consumer space by continuing to deliver membership benefits that span our customers’ everyday spending, borrowing, travel, and lifestyle needs, expanding its roster of business partners around the globe, and developing a range of experiences that attract high-spending customers. In 2025, the company’s net card fee revenue accounted for 72% of its pre-tax income, which we see as providing a differentiated business model that should continue to grow as Amex wins new card members and drives its average fee per card higher.

Target Price: Reiterate $400; Rating: One

Checkpoint: $290

RISKS: Slowdown in consumer spending, competition, membership growth, merchant acceptance, and lack of new product innovation.

Bank of America Corp. BAC; $56.98; 4,245 shares; 3.90%; Sector: Financial Services

UPDATE: After giving back some of their April gains in May, shares of Bank of America (BAC) bounced back and then some in June, closing Q2 2026 up more than 16%. The catalysts for that were the acceleration in IPO activity, including the SpaceX (SPCX) IPO, continued M&A transaction announcements, market volatility and the tailwind of its trading volumes, and the improving economic landscape that should drive BofA’s commercial business. At the Morgan Stanley US Financials Conference held in the first part of June, management commented the current quarter is “going to be a good one.” The team also reiterated that it sees 200-300 basis points in overall company operating leverage this year, up from “more than 200 basis points” in mid-April. Near the end of June, BofA was named one of the lead underwriters for the upcoming U.S. IPO for memory company SK Hynix. While BofA’s competitors announced dividend increases following the results of the latest round of annual bank stress tests conducted by the Federal Reserve, BofA will make a dividend announcement following its July board meeting. We’ll be watching for that announcement, but with financial companies offering a double-digit dividend hike, anything less would be notable. We see further upside ahead in BAC shares, but if we see a slowdown in investment banking activity, that would give us a reason to re-think holding Bank of America in the Portfolio.  At the same time, as BAC shares move past the $60 level, we may need to revisit our One rating.  

June Price Change: 10.4%; Yield: 2.0%

INVESTMENT THESIS: Bank of America is one of the world’s leading financial institutions, serving individual consumers, small- and middle-market businesses, and large corporations with a full range of banking, investing, asset management, and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 69 million consumers and small business clients with approximately 3,700 retail financial centers, approximately 15,000 ATMs, and award-winning digital banking with approximately 59 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking, and trading across a broad range of asset classes, serving corporations, governments, institutions, and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories, and approximately 35 countries. From a reporting perspective, the company’s business breaks down as follows: Net Interest Income breakdown: Consumer Banking 57%, Global Banking 23%, Global Wealth & Investment Management 14%, and Global Markets 6%; Income Before Tax breakdown: Consumer Banking 42%, Global Banking 27%, Global Wealth & Investment Management 16%, and Global Markets 15%. Bank of America pays a quarterly dividend of $0.28 per share, up from $0.18 a few years ago.

Target Price: $65; Rating: One

Checkpoint: $45

RISKS: Financial markets, fiscal, monetary, and regulatory policies, economic conditions, and credit ratings.

Costco Wholesale COST; $935.47; 215 shares; 3.25%; Sector: Consumer Staples

UPDATE:  Shares of Costco (COST) were little changed in June even though the company continued to post stellar monthly adjusted comp sales after delivering a solid quarterly earnings report on May 29 that reaffirmed why we remain long-term bullish on the name. While COST shares traded off given the modest miss contained in that report, they rebounded in the subsequent weeks. To us, the key to Costco’s business is the relationship between growing the number of warehouse locations, which feeds the membership revenue stream and merchandise volumes. Provided Costco doesn’t make the location-over-saturation mistake we’ve seen from the likes of Starbucks and others, we are inclined to remain owners of the shares to capture further upside and the benefit of future special dividend payments. With aggregate inflation pressures poised to sap consumer spending power in the coming months, we continue to see Costco winning consumer wallet share, delivering favorable monthly comp sales along the way. In late June, COST shares slipped below our $970 pickup point, but they are also hugging the 200-day moving average, which in our view offers a nice risk-reward for members that underweight the shares. 

June Price Change: -2.2%; Yield: 0.6%

INVESTMENT THESIS: We like Costco’s long-term prospects, driven by a club-based operating model that focuses on volumes, not margins, and therefore offers its customers a value proposition of everyday low prices. The strength of this model has created an incredibly loyal customer base with low churn and continued share gains in both brick-and-mortar and e-commerce. This is a global concept, evidenced by the strength of sales both in the U.S. and abroad, which includes an emerging China opportunity. We see the company’s membership model as a key differentiator versus other retailers, and its plans to open additional warehouse locations in the coming quarters should drive retail volumes and the higher-margin membership fee income as well. We also appreciate management’s approach to capital returns and their willingness to return cash.

Target Price: Reiterate $1,150; Rating: One

Checkpoint: $900

RISKS: Inability to pass through higher costs, fuel prices, weaker consumer, and membership churn.

Meta Platforms META; $563.29; 337 shares; 3.06%; Sector: Communication Services

UPDATE: Meta (META) shares gave back their April and May gains in June, leaving them down modestly for Q2 2026. Our position on Meta is based on the company’s focus to drive Family Average Revenue per Person (ARPP) higher as the growth in Family Daily Active People (DAP) slows and wring more profits across its platforms by leveraging AI and other cost savings measures. That includes extending advertising and subscription business models across a greater portion of its footprint and growing its reach with the wearables market. To that end, reports in June suggests Meta may be targeting the prediction market that is closely associated with Kalshi and Polymarket. We see that as Meta continuing to wade into areas that would either retain or grow eyeballs and time on platform, which would be attractive to advertisers. In the back half of 2026, we see Meta benefiting from what is shaping up to be a record-setting mid-term election spending cycle as well as the ongoing shift toward digital advertising. Underneath the hood, Meta is increasingly using AI to drive costs out of the business, with reports in June pointing to the company replacing ~50% of human review requests with large language models. The same report indicates Meta is targeting more than 90% for certain types of content by the end of 2026. That bodes well for margins and cash flow generation prospects in the coming quarters, something that should help alleviate concerns over the company’s capital spending plans. On that note, in late June reports indicated Google has put limits on Meta’s use of its Gemini AI models after Meta sought more computing capacity than the rival tech group could provide. This suggests Meta is capacity constrained itself, and that we could see another step up in its capital spending plan when it reports its Q2 2026 results. If we see a pullback in META shares following that report, subject to what we learn, that could open a window of a potentially compelling opportunity. 

June Price Change: -10.9%; Yield: 0.4%

INVESTMENT THESIS: Meta segments its business between Family of App Products, which includes Facebook, Instagram, Messenger, Threads, and WhatsApp, and Reality Labs Products, which includes its metaverse and investments and future product R&D. Family of Apps accounts for about 99% of the company’s revenue and 100% of the company’s operating profits. Substantially all of Meta’s revenue is currently generated from advertising on Facebook and Instagram. Family daily active people (DAP) were ~3.6 billion on average for the March 2026 quarter. Meta expects to spend $162 billion-$169 billion on capex in 2026, a significant increase year over year, with most of this spending focused on AI infrastructure and initiatives. Meta is positioned to benefit from the ongoing shift toward digital advertising and the adoption of AI across its entire product offering. We recognize Meta is ramping up capital spending as part of the current AI arms race, but we see that as an investment that should drive productivity in its core advertising business. As the company harvests that investment, we could see a step up in margins, much like we saw in 2023.

Target Price: $850; Rating: One

Checkpoint: $530

RISKS: Ability to add and retain users and user engagement; marketing spend; new products or changes to existing ones; competitive risk, geopolitical risk.

Netflix Inc. NFLX $71.40; 2,505 shares; 2.89%; Sector: Communication Services

UPDATE: Shares of Netflix (NFLX) were a large drag on the Portfolio in June, following their sharp decline after renewed M&A speculation. Netflix dismissed interest in Lionsgate (LION), but the shares still languished in June, and we used that and the oversold condition as an opportunity to add to our position on June 17 near $78 after picking up some shares earlier in June. Even after those moves, the Portfolio still has room to scale its NFLX position, and we will continue to do so in an opportunistic fashion. What we aim to capture with this position is the company’s growing global subscription base as well as the expanding, higher-margin ad-supported business model. In May, Netflix shared impressive statistics and unveiled new pilots and capabilities across programmatic, agentic AI and data-driven insights. That included the company having 250 million monthly active viewers around the world. Management said that as that base has grown, over 60% of sign-ups are choosing the company’s ad-supported plan, and nearly half of its members, 44%, who see an ad on Netflix never saw it on broadcast TV or other streamers. That argues for Netflix bringing a unique audience to advertisers. That audience is expected to grow in 2027 as Netflix expands its ad plans from its initial 12-country slate to 15 new countries: Austria, Belgium, Colombia, Denmark, Indonesia, Ireland, the Netherlands, New Zealand, Norway, Peru, the Philippines, Poland, Sweden, Switzerland, and Thailand. The platform will also open new ad inventory across podcasts and vertical videos globally in 2027. During the May 13 presentation, Netflix also unveiled new tools, capabilities and partnerships that span planning, buying, and measuring outcomes of ad campaigns. While that event skewed more toward the advertising side of the business, remember the company’s subscription revenue stream will benefit from its late March price increase that adds roughly $1 to $2 per month to all plans in the U.S. That brings the Standard plan to $19.99 per month and Premium to $26.99 per month for new subscribers, and those prices will be phased in for existing subscribers across their billing cycles. This suggests that, more likely than not, once again, Netflix delivered April 2026 guidance that skews conservative, not only for the current quarter but also by reiterating its 2026 guidance that was issued before that domestic March price announcement. As we think about Netflix, the allure of its streaming service is very much in line with the time-tested view that content is king. What we mean by that is Netflix not only has to continue to deliver content that people want to consume, but to grow further, and it has to expand its content offering to win new subscribers and advertising dollars. That’s one reason why we pay close attention to the company’s content slate as well as expansion into games, live events, sporting events, podcasts and others. We also keep our ears open for what is said about Netflix’s internal quality engagement metric hit, which hit an all-time high in Q1 2026. With $6.8 billion remaining under its current share repurchase program, we would not be surprised to learn Netflix was putting that program to work in June. We will continue to look for opportunistic moments to build the Portfolio’s NFLX position as we track streaming market share data from Nielsen and other sources. 

June Price Change: -17.0%; Yield: 0.00%

INVESTMENT THESIS: Netflix is one of the world’s leading entertainment services offering TV series, films, games and live programming across a wide variety of genres and languages. With over 325 million paid memberships, Netflix serves a global audience approaching one billion people. In the second half of 2025, Netflix members watched 96 billion hours on Netflix, up 2% (+1.5 billion hours) year over year vs. a 1% increase in the first half of the year. We attribute that to the company’s growing slate of proprietary content, live events, including sports, and a growing market for games. The company’s revenue is ~45% from the U.S., 31% EMEA, 12% Latin America, and 11% Asia-Pacific. We see Netflix and its growing content slate well positioned to benefit from the ongoing shift to streaming from broadcast and box office content, with margins poised to benefit from a combination of pricing actions and growing exposure to the higher margin advertising revenue.

Target Price: $115, Rating: One

Checkpoint: $70

RISKS: Consumer spending and economic risk, content development and content licensing risks and competitive risks.

Neostellar Capital NSLR; $12.54; 18,785 shares; 3.80%; Sector: Financial Services

UPDATE: Note that effective July 1, SuRo rebranded to Neostellar, and its ticker will transition to “NSLR”. The company will remain a publicly traded business development company focused on high-growth, venture-backed private companies. The first two months of the current quarter were strong ones for the Portfolio’s position in Neostellar Capital (NSLR) and their collected move of more than 28%. The shares were little changed in the first half of June as investors digested the implications of recent IPOs, including SpaceX and Cerebras. In the second half of the month as Cerebras started to falter and that was followed by SpaceX, Neostellar shares traded off. We saw another fall in NSLR shares in late June, when reports emerged that OpenAI, Neostellar’s second largest portfolio holding, may push off its IPO until 2027. We shared our view on that, including why OpenAI’s IPO will eventually happen, leaving it as a catalyst for Neostellar as well as Microsoft and Nvidia. After our portfolio discipline led us to lock in big gains on our NSLR position in May, we used the selloff in the back half of June to scoop up more shares for the Portfolio. Exiting June, NSLR shares were up 17% in Q2 2026 and more than 32% YTD. We see further gains ahead in its investment portfolio and the closely watched net asset value per share figure. In addition to the Lime (LIME) IPO, other companies in the Neostellar portfolio, including Vast Data and ClickHouse, completed capital raises during Q2 2026. Recognizing what’s down the line, we will be patient with NSLR and continue to watch both IPO filings as well as capital-raising efforts from others in its portfolio. Given ist portfolio spans 36 companies, there is always the possibility for an M&A event as well. As part of that rebrand, the company will shift to an externally managed structure, which will be a joint venture between Neostellar and Magnetar, which has $18 billion in assets under management, and will invest $20 million into the company. Our take is that much like us, Magnetar must see something special in Neostellar to make such a move. 

June Price Change: -9.7%; Yield: 4.0%

INVESTMENT THESIS: Neostellar Capital is a business development company (BDC) that invests in high-growth, venture-backed private companies. As Neostellar monetizes those portfolio investments through either IPO or M&A transactions, it must pay out most of its earnings to shareholders in the form of dividends. What’s important to factor into our thinking is that Neostellar’s strategy isn’t to hold public company investments but rather to monetize them following the lock-up expiration. Sometimes this can be immediate, and sometimes it can be in stages, but when that monetization occurs, it triggers dividend payments. And because a BDC must pay out at least 90% of its taxable income through dividends to shareholders, there is the possibility of a special dividend to hit that qualifying threshold late in the year. As we think about this, it means that we should focus on total return with NSLR, which is defined as capital gains in the shares plus dividends received while owning them. What this means is even if we see NSLR shares trade sideways or move lower, depending on the size of the dividend payments in the coming quarters, the position’s total return could still be sizable for the Pro Portfolio. Neostellar’s portfolio holdings at the end of Q1 2026 included OpenAI, Whoop, Plaid, TensorWave, Vast, Blink Health and others.

Target Price: $17; Rating: One

Checkpoint: $11

RISKS: Industry and economic risk, competition and competitive pressures, and acquisition risk.

Nvidia Corp. NVDA; $200.09; 970 shares; 3.13%; Sector: Technology

UPDATE: Shares of Nvidia (NVDA) gave back nearly all the May gains in June, leaving the shares up just shy of 15% for Q2 2026. As tends to be the case in most months, we saw a flurry of headlines pertaining to Nvidia, ranging from analyst comments about strong demand for Blackwell chips, reports Dell and Super Micro Computer unveiled new AI servers backed by Nvidia’s Vera Rubin line of GPUs, and Australian AI infrastructure company Firmus Technologies inking a partnership with Nvidia to make advanced computing resources more accessible to emerging AI companies. Those and other developments, including an extended partnership with our own Palantir point to strong demand for Nvidia’s AI and networking solutions. We’ve also shared multiple signals with you about rising AI adoption and expanding usage across the enterprise, with consumers and other institutions. Against that backdrop and measured against the monthly sales results from Taiwan Semiconductor and Foxconn, among others, we’re not surprised by the strong demand for Nvidia’s chips, and we see that continuing. To the extent we see hyperscalers upsize their capex spending levels again for this year, that would be another positive for Nvidia and our shares. Exiting June, when examined across expected EPS growth between 2025 and 2028, NVDA shares were trading at price-to-earnings growth (PEG) ratios of 0.5x expected 2026 EPS of $8.57 and 0.33x the corresponding $12.39 figure for 2027. Given our current NVDA position size that has us circling the shares and reiterating our One rating. Upcoming catalysts will include June sales figures for TSM and Foxconn as well as hyperscaler capex figures for Q2 2026 and their outlook for the back half of the year. 

June Price Change: -5.2%; Yield: 0.5%

INVESTMENT THESIS: Nvidia is well-positioned to benefit from ramping AI and data center spending. The company pioneered accelerated computing to help solve the most challenging computational problems. Nvidia is now a full-stack computing infrastructure company with data-center-scale offerings that are reshaping the industry. The company’s full stack includes the foundational CUDA programming model that runs on all Nvidia GPUs, as well as hundreds of domain-specific software libraries, software development kits, or SDKs, and Application Programming Interfaces, or APIs. This deep and broad software stack accelerates the performance and eases the deployment of Nvidia accelerated computing for computationally intensive workloads such as artificial intelligence, model training and inference, data analytics, scientific computing, and 3D graphics, with vertical-specific optimizations to address industries ranging from healthcare and telecom to automotive and manufacturing. Nvidia reports in two business segments: Compute & Networking and Graphics. The Compute & Networking segment (78% of revenue, 85% of operating income) is comprised of Data Center accelerated computing platforms and end-to-end networking platforms, including Quantum for InfiniBand and Spectrum for Ethernet; NVIDIA DRIVE automated-driving platform and automotive development agreements; Jetson robotics and other embedded platforms; Nvidia AI Enterprise and other software; and DGX Cloud software and services. The Graphics segment (22% of revenue, 15% of operating income) includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU, or vGPU, software for cloud-based visual and virtual computing; automotive platforms for infotainment systems; and Omniverse Enterprise software for building and operating metaverse and 3D internet applications.

Target Price: $280; Rating One

Checkpoint: $175

RISKS: Market and interest rate risk, credit risk, country risk, and operational risk, including cybersecurity.

Palantir Technologies PLTR; $116.67; 1,685 shares; 3.17%; Sector: Financial Services

UPDATE: After rebounding hard at the end of May, shares of Palantir (PLTR), along with other stocks captured in the iShares Expanded Tech-Software Sector ETF (IGV) sold off hard in June. That made PLTR one of the biggest underperformers in Q2 2026. However, after sitting on the sidelines for most of June, we rolled up our sleeves and did a deep dive on PLTR that uncovered the shares were not only oversold, but despite the fall in the share price, consensus EPS estimates moved up. Our ensuing analysis found that, at the time, PLTR shares were trading at a price-to-earnings growth (PEG) ratio of 0.85 on consensus 2027 earnings and 1.2 on the ones for 2026. That led us to scoop up more shares for the Portfolio at $107.26 on June 25. A few days after that move, Palantir and Nvidia expanded their relationship, in which Nvidia’s AI platform and Palantir’s critical infrastructure products will come together to provide U.S. government agencies with a secure “intelligent engine” for training and the deployment of AI models. We discussed our view that this move with Nvidia will expand Palantir’s reach beyond defense applications, which should pave the way for higher commercial contract value figures in the coming quarters. Meanwhile, comments about hyperscaler capacity issues probably mean Palantir’s commercial business remains on a growth trajectory as well. When Palantir reports its Q2 2026 results, total contract value and customer count for the quarter will be a few of the metrics we focus on. 

June Price Change: -25.5%; Yield: 0.00%

INVESTMENT THESIS: Palantir Technologies specializes in big data analytics and builds software platforms that help organizations integrate, analyze, and make sense of vast amounts of data for both commercial and government clients. While much has been made about the company’s exposure to the federal government, its software is used across 90 industries, and the larger global government sector accounted for 55% of revenue last year. The balance was from the commercial sector. Exiting 2025, Palantir’s U.S. Commercial remaining deal value (RDV) stood at $4.38 billion, up 145% year over year, and its Total Contract Value (TCV) stood at $10.8 billion, up 128% year over year. We will continue to monitor Palantir’s RDV and deferred revenue metrics. Key items to watch include continued diversification of its customer base across industries and increasing revenue per customer. Because we are still in the relatively early innings of AI adoption, we are inclined to be long-term owners of PLTR shares.

Target Price: $220; Rating: One

Checkpoint: $114

RISKS: Economic and IT budget spending risk, technology risk, competition and competitive pressures, and customer acquisition risk.

TWOS

Alphabet GOOGL; $357.37; 600 shares; 3.46%; Sector: Communication Services

UPDATE: Shares of Alphabet (GOOGL) moved lower in June but not as much as other hyperscalers, and we can chalk that relative outperformance up to GOOGL shares being added to the Dow Jones Industrial Average on June 29. That June swoon offset some of the collected gains registered in April and May, leaving the shares up 24% for Q2 2026 compared to just under 15% for the S&P 500. A longer look back, shows GOOGL up more than 100% from our last buy at $166.60 in June 2025. Back then we were early to recognize the mistake it was to count Google out of the AI race given the search, shopping and YouTube data at its disposal. The rose over the last year proved out our thinking, and we see more upside ahead as Alphabet seeks to further monetize its YouTube and Google Cloud segments, while reaping the benefits of the ongoing shift to digital advertising. That positions well, in our view, to capitalize what is shaping up to be a record-setting mid-term election spending this year. In terms of what weighed on GOOGL shares in June, Alphabet priced a record-breaking upsized $84.75 billion equity raise to fund it AI compute and data center expansion. That was after Google inked a three-year deal with SpaceX for cloud compute capacity and before news it limited Meta’s access to its Gemini models. That combination of events suggests Google remains capacity constrained and is likely to increase its capex spending target for this year above the guided $180 billion to $190 billion. Google already telegraphed plans for its 2027 capex to up “significantly” compared to this year. Should the company upsize its 2026 capital spending plans in a meaningful fashion when its reports its Q2 2026 results, that could bring us a compelling pick-up point in the shares. When it reports, we’ll also be listening for comments about Gemini model adoption, plans to expand its AI chip business, and Google Cloud wins, including those with Nokia and HSBC announced in June. In May at Google, I/O, the company shared that more than 900 million people are using its Gemini assistant, up from 740 million monthly active users at the end of 2025. Based on the company’s position in key aspects of our increasingly digital lifestyle and its growing role in digital infrastructure, we are inclined to remain longer-term shareholders as AI adoption and usage expand further. We see more margin improvement ahead for Google Cloud as the company monetizes its $460 billion backlog. While the Portfolio has a sizable position in the shares, we will continue to look for attractive levels for members whose position size is less than the Portfolio’s.

June Price Change: -6.0%; Yield: 0.2%

INVESTMENT THESIS: We believe that while search and digital ad dominance are what will carry the shares in the near-to mid-term, longer-term, it is the company’s artificial intelligence “moat” that will provide for new avenues of growth. Exiting October 2025, Alphabet surpassed 300 million paid subscriptions across Google One and YouTube. AI is what has made the company’s search, video, and targeted ad capabilities best-in-class and is the driving force behind the company’s success in voice (Google Home) and autonomous driving (Waymo). Furthermore, we believe it is this AI expertise that will also make the company more prevalent in other industries, including healthcare via its subsidiary Verily, as AI and machine learning continue to disrupt operations across industries. As of late 2025, Google’s Gemini app had over 650 million monthly active users. Adding to our positive view of the company’s future opportunities, we believe that Alphabet’s free cash flow generation and solid balance sheet set it apart and are what will allow the company to continue taking chances on far-out, ground-breaking, and potentially world-changing projects, as well as fund capital returns to shareholders. We will continue to monitor advertising spend as well as the competitive landscape for the company’s core Search and Advertising business. Should we see GOOGL shares pull back near the 50-day moving average, near $295, that incremental upside to our price target would give us sufficient reason to revisit our Two rating.

Target Price: Reiterate $410; Rating: Two

Checkpoint: $305

RISKS: Regulatory risk (data privacy), competition, and macroeconomic slowdown impacting consumers and therefore ad buyer activity.

Amazon AMZN; $238.34; 801 shares; 3.08%; Sector: Consumer Discretionary

UPDATE: Shares of Amazon (AMZN) stumbled in the low double-digits in June, following a similar path as other hyperscalers during the month. Combined with the gains registered earlier in April and May that led Amazon to close Q2 2026 up more than 14%. While some may be frustrated by Amazon’s June performance, we will continue to play the long game with the name as it continues to shrink average time to customer for its digital shopping business, scale and benefit from AI adoption and usage, and grow its digital advertising reach. During June, Amazon announced price increases for AWS effect July 1 for GPU rentals. With IT executive survey pointing to greater software and AI spending this year compared to 2025, odds are that price increase will stick. Amazon also announced plans to sell its custom AI chips to other companies with data center needs, which is also a nice data point for our shares of Marvell and Broadcom. Shoring up its networking capacity needs for its AWS capex plans, Amazon inked a multi-year, multi-billion-dollar deal with Corning for data center optical fiber. Outside of AWS, Amazon officially launched its supply chain services business, which allows other to tap its vast logistics and growing delivery network. We see it as a nice way to further monetize its investment. Near the end of June, Amazon held its 2026 Prime Day, which according to Adobe generated $26.4 billion in U.S. sales over the four-day event. The 9.3% year-over-year growth was above Adobe’s initial forecast for 9.0%. By category, online sales across U.S. retailers were driven by electronics (up 120% vs. average daily sales in June 2026), appliances (up 90%), tools and home improvement (up 70%), home and garden (up 65%), and furniture and bedding (up 55%). Shoppers also embraced AI-powered chat services and browsers to research products and find deals. Once shoppers landed on a retail site, they converted 40% better than non-AI channels in a notable shift from the Prime event last year, where AI traffic converted 23% worse. With inflation pressures poised to linger, we continue to see Amazon well positioned especially as it expands the reach of same-day and next-day delivery heading into the holiday shopping-filled second half of the year. We continue to see Amazon’s AWS business benefiting from AI adoption and expanded usage in the enterprise and in the government sector. During the last few months, AWS garnered wins with OpenAI, Anthropic, Meta, Uber, U.S. Bank, Fox, Southwest Airlines, U.S. Army, Bloomberg, Cerebras, AT&T, Nokia, Fundamental, The National Geographic Society, and PGA Tour, among others. In keeping with our Two rating, we are watching both the fundamental and technical setup in the shares, and near-term that means watching the 50-day moving average and the MACD indicator. We suspect the hyperscalers will step up their capex plans when they report their Q2 2026 results, and that could deliver another widow of opportunity. 

June Price Change: -11.9%; Yield: 0.00%

INVESTMENT THESIS: We believe that upside will result from Amazon’s continued e-commerce dominance, AWS’s continued leadership in the public cloud space, and the ongoing growth of the company’s advertising revenue stream, which feeds off Amazon’s e-commerce business. Additionally, we think profitability will continue to improve as AWS and advertising account for a larger portion of total sales, as both these segments sport higher margins than the eCommerce operation. While we believe the increasing share of the revenue from these higher-margin businesses will be key to driving profitability longer-term, we think margins on eCommerce stand to improve as the company’s infrastructure is further built out and economies of scale further kick in. The embedded call option is that management is always looking to enter a new space and generate new revenue streams. Outside of the company’s core businesses, per recent 13F-HR filings, Amazon holds a stake of 158.36 million shares in Rivian, 225,428 shares in Marvell, as well as positions in other companies. It has also committed to a $50 billion investment in OpenAI.

Target Price: Reiterate $310; Rating: Two

Checkpoint: $210

RISKS: High valuation exposes the stock to volatile swings, e-commerce has exposure to slower consumer spending and competition, potential headwinds resulting from new e-commerce regulation in India, and management is not scared to invest aggressively for growth, which can at times cause volatile reactions as near-term concerns arise relating to the impact on margins.

Apple AAPL; $289.36; 825 shares; 3.85%; Sector: Technology

UPDATE: The upward climb put in by Apple (AAPL) shares in April and May continued in early June, but they came under pressure following the company’s underwhelming WWDC 2026 keynote presentation. While the company showcased its update Apple Intelligence and Siri Intelligence as expected, the change in format and lack of clear presentations on what those mean across Apple’s software platforms left more questions than answers. Walking away from the event, our view is the reception as the new software platforms move into public betas in July will be far more insightful about a potential reacceleration in upgrade cycles for Apple’s products. Apple shares rebounded in the ensuing weeks but fell under another bout of pressure when outgoing CEO Tim Cook alluded to potential price increases given memory contains and prices. Sure enough, Apple did raise prices on a number of products, and that led the shares to fall further toward the end of June. What Apple did not announce in those price increases was a hike for iPhones. Our thinking is that will likely come when Apple unveils its new models, most likely in September. Normally at this time of year, we would be tracking smartphone market comments from known Apple suppliers and partners like Taiwan Semiconductor and Foxconn, but this time around iOS 27 beta reviews will be as much of a focus. If those reviews are favorable and help stoke demand for the iPhone upgrade cycle despite potentially higher prices, that could open an opportunity window with AAPL shares. 

June Price Change: -7.3%; Yield: 0.4%

INVESTMENT THESIS: While we acknowledge that near-to-mid-term performance remains heavily influenced by iPhone sales, the dynamic is shifting as investors finally place greater emphasis on Services growth. We are bullish on the 5G upgrade cycle and believe longer-term upside will continue to come as Services revenue grows its share of overall sales. Services provide for a recurring revenue stream at higher margins, a factor that serves to reduce earnings volatility while allowing for a higher percentage of sales to fall to the bottom line; as a result, we believe that Services growth and the installed base are much more important than how many devices the company can sell in each 90-day period. In addition to improved profitability, we also believe the transparent nature of this revenue stream will demand an expanded price-to-earnings multiple as segment sales grow. Furthermore, we believe that Apple’s desire to push deeper into the healthcare arena will help make its devices invaluable as more life-changing features are added and the company works to democratize health records.

Target Price: Reiterate $305; Rating: Two

Checkpoint: $268

RISKS: Slowdown in consumer spending, competition, lack of new product innovation, elongated replacement cycles, and failure to execute on Services growth initiatives.

Applied Materials AMAT; $723.00; 232 shares; 2.71%; Sector: Semiconductors

UPDATE: Shares of Applied Materials (AMAT) soared in June, rising just over 60%. Paired with gains double-digit gains in April and May, the shares rose 111% in Q2 2026, making them the Portfolio’s second-best performer for the quarter. The drivers behind that share performance are the continued ramp in AI and data center chip demand that is constraining existing capacity, forcing companies from Apple to Microsoft and others to raise prices to contend with higher memory prices. Micron lifted its capital spending for this year, and South Korea laid out a multi-billion-dollar spending plan to invest at least $880 billion to build out the country’s chip manufacturing and artificial intelligence (AI) capabilities. Two of the country’s largest chip companies, Samsung and SK Hynix, are Applied customers. In the nearer-term, global semiconductor equipment sales are projected to reach $145 billion in 2026, building toward a record $156 billion by 2027. As we see it, tight chip industry capacity is pushing demand for Applied’s semiconductor systems business and its gross margins, which are approaching 55%. Taking the 11% year-over-year revenue increase booked in the reported April-quarter against management’s guidance of $8.95 billion for the current July quarter implies a 17% year-over-year increase for those two quarters. That suggests a far stronger revenue ramp in the back half of 2026 and into 2027. In response to those and other factors, we bumped our AMAT price target to $800 and our checkpoint to $600 on June 30. As we made those changes, we also noted the shares entered an overbought condition following their June surge. While our rating on the shares is a Two, that may prompt some prudent portfolio management in the coming days. 

June Price Change: 60.6%; Yield: 0.3%

INVESTMENT THESIS: The outlook for semiconductor capital equipment, an industry that delivered ~$133 billion in 2025, remains very bright. SIA sees industry deliveries rising to $145 billion this year and $156 billion in 2027, and others see a continued step function higher through 2030. Underpinning that forecast is continued spending on AI and data centers, and corresponding equipment, as well as other connected devices, including appliances as well as cars and trucks. Applied Materials holds a leading position in the global semiconductor wafer fabrication equipment (WFE) market, with a market share estimated at approximately 19% in 2025. As a broad-portfolio supplier, it dominates in deposition (44% share) and maintains a strong presence in etch, CMP, and ion implantation tools. Major customers include TSMC, Samsung, Intel, SK Hynix, and Micron, along with key partnerships involving Apple and Texas Instruments

Target Price: Reiterate $800; Rating: Two

Checkpoint: $600

RISKS: Customer capital spending levels, currency, and economic risk.

Arista Networks ANET; $169.88; 1,410 shares; 3.87%; Sector: Technology

UPDATE: After soaring more than 40% in April and giving a piece of that gain back in May, Arista Networks (ANET) experienced a choppy June that culminated with the shares finishing the month up more than 6%. The aggregate Q2 2026 move in ANET shares totaled 38%, leaving them up just under 30% for the first half of 2026. While some of that late June decline can be traced to questions over the timing for OpenAI’s eventual IPO, other signals during the month point to ramping revenue ahead for Arista. One of those signals was an interview with Ciena CEO Gary Smith that the telecom industry is underestimating AI’s network demand. Supporting that was the following, found in Cisco’s recently published AI impact on Wide Area Networks report – Consumer adoption of AI and agentic AI is projected to drive growth in consumer-driven network traffic ~6.6×, representing 63% additional growth compared to 4x growth in non-AI scenarios in the same period—making AI the dominant driver of overall internet traffic expansion. Those and other data points that support our view that rising AI adoption and expanding usage will drive the demand for networking higher keep us bullish on ANET shares. Remember, exiting Q1 2026, Arista’s total deferred revenue balance was $6.2 billion, up from $5.37 billion at the end of 2025 and up ~100% compared to Q1 2025. We’ve seen capacity constraints limit the ability to convert deferred revenue into booked sales, but key Arista customer, Microsoft, should see further capacity gains as Broadcom starts shipping custom AI silicon for OpenAI in H2 2026. We will continue to watch hyperscaler spending, which is expected to reach $757 billion this year, up from 84% year over year, before rising to $920 billion in 2027. Goldman Sachs thinks 2027 spending could come in closer to $1.1 trillion. While the Pro Portfolio has a largely full ANET position, we will continue to look for compelling risk to reward levels for members who are underweight the shares. 

June Price Change: 6.5%; Yield: 0.0%

INVESTMENT THESIS: Arista Networks engages in the development, marketing, and sale of data-driven, client-to-cloud networking solutions for AI, data center, campus, and routing environments in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. Its cloud networking solutions consist of Extensible Operating System (EOS), a publish-subscribe state-sharing networking operating system offered in combination with a set of network applications. The company offers data center, cloud, and AI networking, cognitive adjacencies, and cognitive network software and services. It also provides post-contract customer support services, such as technical support, hardware repair, and replacement parts beyond standard warranty, bug fixes, patches, and upgrade services. The company serves a range of industries comprising internet companies, cloud service providers, financial services organizations, government agencies, media and entertainment, healthcare, oil and gas, education, manufacturing, industrial, and others. Two of Arista’s largest customers in the last few years are two Portfolio holdings you’ll quickly recognize — Microsoft and Meta. Per Arista’s 10-K filings, both Meta and Microsoft each account for more than 10% of revenue. Other named customers include Amazon’s AWS, Google Cloud, Anthropic, Canva, SAP, Shopify, Apple, Oracle, Bank of America, and Accenture.

Target Price: $180; Rating: Two

Checkpoint: $134

RISKS: Economic, customer, supply chain, and competition risks.

Axon Enterprise AXON; $560.61; 500 shares; 4.52%; Sector: Aerospace & Defense

UPDATE: June was bit of a roller-coaster ride for Axon (AXON), but ultimately the shares powered ahead given multiple management investor presentations during the month, which were complemented by numerous signals about adoption for its products and services. The shares also received a boost when reports emerged indicating President Trump purchased between $1 million and $5 million of shares earlier this year. Layering the 25% gain in June, AXON shares closed Q2 2026 up more than 32%. On July 1, we used the continued strength in the shares, which pushed them into an overbought condition and resulted in a stretched position size for the Portfolio, to do some prudent portfolio management that also locked in another big gain for the Portfolio. As we made that move, we also downgraded the shares to a Two rating. At the 46th Annual William Blair Growth Stock Conference in early June, management shared that in 2025 it sold over $750 million bookings for dedicated AI tools, and in Q1 2026 that figure climbed 140% year over year. Management also reiterated its 2028 target guidance of 28% EBITDA margins compared to the 25.5% expected for 2026. In our view, that points to the continued mix shift toward the higher margin Software & Services segment, which leverages the company’s hardware business. Future contracted bookings, a key metric that we watch for Axon, dipped to $14.3 billion exiting Q1 2026, down from $14.4 billion in the prior quarter. Looking back over the last several years, that pattern is typical and matches the quarter being the seasonally weakest. However, the company’s deferred revenue climbed to $1.05 billion, which offers nice revenue coverage for management’s upsized revenue guidance for 2026. Also in June, the Calgary Police Service has become the first law enforcement agency in Canada to deploy a real-time translation feature on officers’ body-worn cameras. On the back of that announcement, the Vancouver Police Department announced it was expanding its use of technology from Axon, including the deployment of drones, body-worn camera capabilities and in-car video systems designed to provide officers with additional information during incidents. Those announcements paired with the other signals we share during the month point to further adoption of Axon’s products and services across the public safety, retail and international markets. Axon’s unified system marries software and sensors with a real-time connection to drive productivity. That productivity is poised to increase as AI adoption rises in public safety and law enforcement, and in many respects, it has to because of law enforcement and public safety staffing shortages. Pain points and the companies that address them make for good investments, though there will be a few bumps near-term, including ramping newer programs and supply chain constraints. To us, the more important indicators to watch will be management’s comments about AI adoption, expanding usage of its body cameras and drone products, and future contracted booking indications when Axon reports its Q2 2026 results. 

June Price Change: 24.9%; Yield: 0.00%

INVESTMENT THESIS: Axon Enterprise develops, manufactures, and sells conducted energy devices and cloud-based digital evidence management software designed for use by law enforcement, corrections, military forces, private security personnel, and private individuals for personal defense. The company operates in two segments: Taser (recently renamed Connected Devices) and Software & Sensors (recently renamed Software & Services). Taser develops and sells CEDs used for protecting users and virtual reality training. Software & Sensors manufactures fully integrated hardware and cloud-based software solutions such as body cameras, automated license plate reading, and digital evidence management systems. Axon delivers its products worldwide and gets most of its revenue from the United States. According to Mordor Intelligence, the wearable and body-worn cameras market on its own was valued at $1.62 billion in 2020 and is expected to reach $424.63 billion by 2026. Public safety organizations are increasingly adopting cloud solutions, leading to significant spending in this area. The digital spending in public safety is projected to reach $201 billion by 2027.

Target Price: Reiterate $700; Rating: Two

Checkpoint: $400

RISKS: Manufacturing and supply chain, competitive factors, government regulation, and technology change.

The Boeing Company BA; $216.47; 558 shares, 1.95%; Sector: Industrials

UPDATE: On June 15, called up Boeing (BA) to the Portfolio from the Bullpen with an initial slug of shares at $227.78, followed by another batch at $225.18 on June 18. In the second half of June, given the size of the position, BA shares were a modest drag on the Portfolio, but we have ample room to scale the Portfolio’s exposure as Boeing reaps the benefits of higher aircraft production levels. Exiting May, Boeing’s backlog stood at 6,178 aircraft, measured against the 250 deliveries it’s made year-to-date, up from 220 for the same five-month period last year. In May, Boeing’s deliveries stepped up to 60 aircraft, and chatter is that the company is looking to lift production levels further. In the May Durable Orders report, we found the three-month moving average for durable shipments of nondefense aircraft and parts for April and May 2026 combined was up 8% on a year-over-year basis. In late June, Boeing announced two big wins, one for its Commercial Airplane division, the other for its Defense, Space & Security segment. The next data point we’ll be watching for Boeing is the June 2026 delivery figure, which will likely be after the July 4th holiday weekend. Boeing’s May delivery increased to over 60 commercial aircraft compared to 47 in April. In Q1 2026, Boeing delivered 143 aircraft, and in Q2 2025, the tally was 150 commercial aircraft. Based on April and May 2026 deliveries, Boeing should sail past those figures. We’ll know by how much when we walk through that June delivery schedule, and what we see could be a catalyst for the shares and maybe a reason to scoop more up below our cost basis. 

June Price Change: -4.7%; Yield: 0.00%

INVESTMENT THESIS: Boeing is an aerospace company that reports its business in three operating segments – Commercial Airplanes (47% of 2025 sales), Defense, Space & Security (30%), and Global Services (23%). Our focus is on Boeing’s Commercial Airplane business, the operational leverage and EPS improvement that should follow increasing production levels. Factors fueling the rise in new aircraft demand, which is reflected in Boeing’s multi-year backlog, include pandemic passenger travel, the need to replace aging, inefficient fleets, and supply chain delays that have artificially tightened aircraft availability. Industry projections indicate that airlines will require over 43,000 new aircraft — primarily single-aisle jets — to meet rising passenger traffic and replace older, less efficient models.

Target Price: $260; Rating: Two

Checkpoint: $190

RISKS: Industry demand, defense spending, supply chain, and competitive risk.

Broadcom Inc. AVGO; $377.75; 555 shares; 3.38%; Sector: Technology

UPDATE: Following back-to-back gains in April and May, shares of Broadcom (AVGO) sank more than 15%, leaving their Q2 2026 gain at 22%, still well ahead of the S&P 500. Broadcom shares were a bit of a battleground in June, starting with the company’s latest quarterly results, which included a slight shortfall for its AI chip guidance for the current fiscal year. Broadcom targets $56 billion, Wall Street was looking for $57.6 billion. As we shared at the time, the larger story is the continued ramp in Broadcom’s AI semiconductor business and the guidance for it to be in excess of $100 billion in fiscal 2027, up from the $56 billion targeted for the current one, which is up 180% compared to 2025. In response we lifted our AVGO price target to $525 from $475 and reset our rating at One, up from Two. The shares moved against those changes in the ensuing weeks but that also gave us a chance to pick up more shares later in the month. A few days later, on June 11, we added more AVGO shares near $377, using the market’s reaction to Oracle’s earnings to do so. In those results, the surge in Oracle’s RPOs and upsized capital spending figures are the latest signals for AI and data center chip demand. Later in June, Broadcom and OpenAI announced they are collaborating on 10 gigawatts of custom AI accelerators that would start arriving in the second half of 2026. The timing for the initial shipments speaks to the strong ramp Broadcom telegraphed for the back half of the year on its latest earnings call. Also, Broadcom plans to start deploying racks of AI accelerator and network systems in H2 2026 and continue through the end of 2029. That is some very nice multi-year visibility, and it’s another nod to the comment CEO Hock Tan made back in early March about a “line of sight to achieve AI revenue from chips, just chips, in excess of $100 billion in 2027.” Remember, OpenAI is one of the five custom AI silicon customers at Broadcom, with others including Google, Meta, Anthropic, and ByteDance. It’s also well positioned to capitalize on the demand for networking. That combo keeps us bullish on AVGO shares as does the robust outlook for its networking business. The pullback has AVGO shares approaching their 200-day moving average near $360, and we like the shape that is unfolding with its MACD indicator. We have room to grow the position size further, and this may be an opportunity for us and members whose AVGO position size is less than the Portfolio’s.

June Price Change: -15.4%; Yield: 0.7%

INVESTMENT THESIS: We became shareholders in Broadcom to participate as the company benefits from the buildout of digital infrastructure, including AI, data center, and custom AI chips, as well as demand for its software and services segment, which includes private cloud, mainframe software, cybersecurity, and enterprise software. Broadcom reports its business in two segments – Semiconductor Solutions (58% of sales and 51% of operating income) and Infrastructure Software (42%, 49%). The Broadcom management team has developed a track record of delivering organic growth and growth by acquisition, with the latter positioning the company to better position itself to meet developing demands. More recent acquisitions include Brocade Communications, CA, Inc., Symantec Enterprise Security, and VMware.

Target Price: $525; Rating: Two

Checkpoint: $340

RISKS: Economic, governmental regulations, geopolitical developments, cyclical, and investment risk.

Eaton Corp. ETN; $426.12; 568 shares; 3.91%; Sector: Industrials

UPDATE: Similar to several other holdings in the Portfolio, June was a choppy month for shares of Eaton Corp. (ETN) as growing awareness of the electricity pain point battled renewed questions over AI and datacenter spending. We recognize shares of Eaton are likely to be volatile week to week and at times month to month, but we will continue to focus on the growing number of confirmation points that speak to the need to address the electrical grid, its capacity and its reliability. Following the signposts, we remained bullish on ETN, which ultimately climbed more than 6% in June, leaving them up more than 19% in Q2 2026. According to the U.S. Energy Information Administration, the U.S. is facing a massive surge in electricity demand, requiring an estimated 80 gigawatts (GW) of additional capacity annually over the next 20 years to meet rising needs from AI data centers, manufacturing and electrification. By 2030, electricity consumption could jump 20%, requiring peak load capacity to rise significantly from current levels. PowerLines found that investor-owned utilities are planning to spend at least $1.4 trillion over the next five years through 2030 on capex, a more than 21% increase over the $1.1 trillion over a five-year period outlined last year. On a global basis, we turn to the International Energy Agency and its findings that across the globe, electricity capacity is projected to more than triple by 2050, reaching approximately 30 terawatts. Those are two powerful tailwinds blowing on Eaton’s business. During June, Eaton took a step to becoming a purer electrical and aerospace company by announcing it will merge with its Mobility business in a $5.1 billion deal with Dana. Under the deal terms, Eaton would receive a cash distribution of ~$1.1 billion and own at least 50.1% of the combined entity. We used that news on June 11 to pick up some additional ETN shares for the Portfolio at $380.17. While the Portfolio has a relatively full ETN position, we will continue to look for a compelling level at which members who are underweight the shares can add to their holdings. Upcoming catalysts as we enter the Q2 2026 earnings season include hyperscaler capital spending announcements and electric utility capita plans.

June Price Change: 6.4%; Yield: 1.0%

INVESTMENT THESIS: Eaton is an intelligent power management company that makes products for data center, utilities, industrial, commercial, machine building, residential, aerospace, and mobility markets. That business is positioned to capitalize on the mega trends of electrification, energy transition, and digitalization. We see Eaton helping address the power pain point created by data center, EV charging infrastructure, and other drivers of electricity demand. Research estimates that data center power demand will grow 160% by 2030, accounting for 3% to 4% of global power, up from 1% to 2% today. Data centers will use 8% of U.S. power by 2030, compared with 3% in 2022.

Target Price: Reiterate $450; Rating: Two

Checkpoint: $340

RISKS: Raw material costs, labor costs, end market volatility, and government legislation.

First Trust Nasdaq Cybersecurity ETF CIBR; $89.85; 2,285 shares; 3.31%; Sector: Cybersecurity

UPDATE: Following the combined increase of more than 40% in April and May, shares of the First Trust Nasdaq Cybersecurity ETF (CIBR) inched ahead a bit more in June. Our position remains that AI in the hands of bad actors would not only accelerate the velocity of cyberattacks but also expand their scope. We see further attack vectors driving the need for greater cybersecurity spending in the coming quarters, and each week we see confirming real-world signals supporting that view. The decline in the share price in June pulled them out of a deeply overbought condition, putting them above $85 target toward the end of the quarter. While we remain bullish on the long-term prospects for cybersecurity spending as companies, governments, and other institutions need to protect their crown jewels, what we see in Q2 2026 bookings and backlog figures from key CIBR constituents will influence the next move for our price target. As we assess those figures, we will be mindful of the technical setup for the shares. 

June Price Change: 0.9%; Yield: 0.3%

INVESTMENT THESIS: The First Trust Nasdaq Cybersecurity ETF seeks investment results that correspond generally to the price and yield (before the fund’s fees and expenses) of an equity index called the Nasdaq CTA Cybersecurity Index. The Nasdaq CTA Cybersecurity Index is designed to track the performance of companies engaged in the cybersecurity segment of the technology and industrial sectors. It includes companies primarily involved in the building, implementation, and management of security protocols applied to private and public networks, computers, and mobile devices to protect the integrity of data and network operations. To be included in the index, a security must be listed on an index-eligible global stock exchange and classified as a cybersecurity company as determined by the Consumer Technology Association. Each security must have a worldwide market capitalization of $250 million, have a minimum three-month average daily dollar trading volume of $1 million, and have a minimum free float of 20%.

Target Price: Reiterate $85; Rating: Two

Checkpoint: $70

RISKS: Cybersecurity spending, technology and product development, the timing of the product sales cycle, new products, and services in response to rapid technological changes and market developments, as well as evolving security threats.

Labcorp Holdings Inc. LH; $280.00; 790 shares; 3.57%; Sector: Healthcare

UPDATE: Labcorp (LH) rebounded in June as tech shares came under pressure and that led LH to become a positive force for the Portfolio in Q2 2026. We continue to favor the steady pace of growth at Labcorp that is fueled by its expanding battery of tests and share gains in hospital and related lab markets that are complemented by its nip and tuck-in M&A strategy. Management presented at the Jefferies Global Healthcare Conference in early June discussing structural factors, like the aging population, that are driving demand for diagnostic testing. What stood out to us was management comment that as it scales the number of tests offered, fixed-cost absorption should drive favorable incremental margins, dropping more to the company’s bottom line. We tend to think of that with manufacturing companies, but the logic holds when it comes to testing equipment as well. The current size of Labcorp’s testing menu is excess of 6,500, and the team is focused on several key areas to grow that array, including neurology. Management also telegraphed its book-to-bill figures, which stood at 1.04 exiting Q1 2026 should improve through the balance of the year. Management discussed a potential Investor Day in September, an event that could dig deep on the company’s business and give us reason to revisit our current $300 target. 

June Price Change: 7.7%; Yield: 1.0%

INVESTMENT THESIS: Labcorp is a global leader in innovative and comprehensive laboratory services that provide vital information to help doctors, hospitals, pharmaceutical companies, researchers, and patients make clear and confident decisions. By leveraging its diagnostics and drug development capabilities, the company provides insights and accelerates innovations to improve health and improve lives. The company is organized under two segments, consisting of Diagnostics Laboratories (Dx), which includes routine testing and specialty/esoteric testing, and Biopharma Laboratory Services (BLS), consisting of Early Development Research Laboratories and Central Laboratory Services. Our attraction to LH shares stems from the combination of the aging population driving diagnostic testing growth and the increasing array of diagnostic testing as well. That combination is expected to drive the healthcare testing services market to $12.6 billion by 2029, from $7.4 billion in 2024, according to Markets and Markets. To augment its position in oncology, women’s health, autoimmune diseases, and neurology, the company has been expanding through acquisitions and partnerships with health systems and regional and local labs.

Target Price: Reiterate $300; Rating: Two

Checkpoint: $245

RISKS: Macroeconomic factors, changes in healthcare reimbursement models and products, government regulations, product discontinuations, or recalls.

Marvell Technology MRVL; $297.89; 455 shares; 2.19%; Sector: Technology

UPDATE: For the third consecutive month, shares of Marvell (MRVL) were another stellar performer for the Portfolio. Adding their accelerated climb in June, which topped 45%, MRVL increased just over 200% for Q2 2026. That strength throughout the quarter led us to lock in gains, once in early June, and again on June 22 at $303.16. The first sale in June followed bullish comments on Marvell from Nvidia CEO Jensen Huang, that included him saying that networking is poised to be a bottleneck for AI adoption, and hoisted the RSI level on MRVL near 84. The second sale later in the month followed the continued melt up in the shares as well multiple comments that spoke to the rising demand for networking and AI. One of those signals was an interview with Ciena CEO Gary Smith that the telecom industry is underestimating AI’s network demand. Supporting that was the following we found in Cisco’s recently published AI impact on Wide Area Networks report – Consumer adoption of AI and agentic AI is projected to drive growth in consumer-driven network traffic ~6.6×, representing 63% additional growth compared to 4x growth in non-AI scenarios in the same period—making AI the dominant driver of overall internet traffic expansion. Those and other data points that support our view that rising AI adoption and expanding usage will drive the demand for networking higher keep us bullish on MRVL shares. On June 30 we raised our MRVL price target to $340 from $240 following strong guidance from Micron, South Korea’s multi-billion dollar plans for AI, data center and chip capacity, and increasing signs hyperscaler capacity remains tight, suggesting another leg up in capex spending. Marvell’s revenue for the current quarter is projected to grow double digits sequentially, with at least 10% sequential growth in each of the following two quarters. Some back-of-napkin math puts that revenue at $11.5 billion for the current fiscal year that ends in January 2027. Looking further out, Marvell noted its data center revenue growth in fiscal 2028 is expected to pick up to ~55% year over year. The communications end market is still slated to deliver low single-digit percentage revenue growth in fiscal 2028. Putting those pieces together, total company revenue is forecasted to grow approximately 45% in fiscal 2028, which implies ~ $16.5 billion, roughly $1.5 billion higher than management’s prior guidance and the market consensus. On the topic of Marvell’s custom AI silicon business, management said it has won several new designs during the quarter, and those sockets are expected to start contributing incremental revenue following their typical development cycle of approximately two years. With that, Marvell reiterated its $10 billion custom revenue target for fiscal 2029. As we think about that, consider that Marvell’s new total revenue target for this year is $11.5 billion. We will continue to play the long game with Marvell, especially since we are still in the first third of the ball game. With that in mind, we will continue to track monthly revenue reports from Taiwan Semi and Foxconn as well as AI and data server shipments from Dell and HPE.

June Price Change: 45.3%; Yield: 0.1%

INVESTMENT THESIS: Marvell is a fabless supplier of high-performance standard and semi-custom infrastructure semiconductor solutions. These solutions power the data economy, enabling the data center, carrier infrastructure, enterprise networking, consumer, and automotive/industrial end markets. With roughly 75% to 80% of Marvell’s revenue stream tied to digital infrastructure, we see it continuing to benefit from rising content consumption and creation. Pointing to that rising demand that necessitates network densification and the build of digital infrastructure, Ericsson sees global monthly average usage per smartphone reach 46 gigabytes (GB) by the end of 2028, versus 19 GB in 2023 and 15 GB in 2022.

Target Price: Reiterate $340; Rating: Two

Checkpoint: $220

RISKS: Technology risk, customer risk, competition risk, reliance on manufacturing partners, and supply chain constraints.

Microsoft Corp. MSFT; $373.02; 473 shares; 2.85%; Sector: Technology

UPDATE: Following a move higher in April and May, those gains for shares of Microsoft (MSFT) were largely wiped out by late June. Netting out those monthly figures, MSFT shares were modestly positive in Q2 2026. We discussed why we remain bullish on Microsoft as it adds cloud capacity and is increasingly able to convert its $627 billion in remaining purchase orders exiting the March 2026 quarter. Following that dialog with members, on June 26, we used the pronounced June pullback to bulk up further on MSFT shares. we continue to see Microsoft and its cloud position benefiting from the continued adoption of AI and its expanding usage across the enterprise and other user segments, including government. Comments from Micron about when it sees memory chip supply-demand dynamics starting to improve as well as pending action by Samsung and SK Hynix suggest the demand for digital infrastructure far outweighs the supply. That bodes well for further cloud bookings at Microsoft. And as the company is able to convert the $627 billion in remaining performance obligations (RPOs) it had at the end of March into revenue over the coming quarters, we should see cloud revenue remain on a growth path, leading margins to rebound over time. While that is our primary fundamental focus at Microsoft, we will continue to monitor the road to OpenAI’s IPO given the 27% stake held by Microsoft. We will also continue to track Microsoft’s AI efforts. In mid-June, Microsoft announced the general availability of its AI agent Copilot Cowork worldwide. That and the National Health Service England announcing it would be rolling out Microsoft 365 Copilot to its 505,000 staff members suggests Wall Street may be lowballing the number of Microsoft Copilot seats. With AI adoption rising and use cases expanding, Microsoft’s cloud position leaves it well positioned for the long-term, and we can afford to be patient with the shares trading around 20x expected 2027 EPS, even with multiple layers of technical resistance on the chart. 

June Price Change: -17.2%; Yield: 1.0%

INVESTMENT THESIS: We believe the cloud to be a secular growth trend and that the upside to the shares will result from Microsoft’s hybrid cloud leadership as the company grabs market share in this expanding industry. While companies may look to build out multi-cloud environments, Microsoft’s Azure offering will be a prime choice thanks to its decision to provide the same “stack” used in the public cloud to companies for their on-premises data centers. Additionally, we would note that hybrid environments are currently the preference for most companies because they allow them to maintain critical data in-house while taking advantage of the agility and scalability provided by public clouds. Outside of the cloud opportunity, we maintain a positive view on the company’s growing gaming business, which we believe is becoming an increasingly prominent factor in the Microsoft growth story as gaming becomes more mainstream, management works to convert its gaming revenue from a one-time license purchase to a recurring subscription model, and as technologies like augmented/virtual reality evolve. Finally, as it relates to LinkedIn and other subscription-based services such as O365 and various Dynamics products, we continue to value them highly for their recurring revenue streams, which, we remind members, provide for greater transparency of future earnings.

Target Price: $500; Rating: Two

Checkpoint: $345

RISKS: Slowdown in IT spending, competition, and cannibalization of on-premises business by the cloud.

Morgan Stanley MS; $209.04; 1,150 shares; 3.88%; Sector: Financial Services

UPDATE: Coming into June, shares of Morgan Stanley (MS) were up north of 20% QTD following their back-to-back gains in April and May. The SpaceX IPO roadshow and eventual oversubscribed offering, along with other IPO and M&A activity, led MS shares to touch $230 in mid-June. The subsequent decline in SPCX as well as the decline in Cerebras shares below their IPO price weighed on MS in the back half of the month. However, reports in late June that OpenAI was contemplating pushing its IPO into 2027 from late 2026 led MS shares to finish June up slightly. Putting the monthly returns together, MS shares climbed more than 27% in Q2 2026. We shared our view that OpenAI’s eventual IPO is a matter of when, not if, and that near-term questions over the IPO market will be determined by the spate of upcoming offerings, their pricing and post IPO performance. But let’s also remember there are other legs to the investment banking revenue stool beyond IPOs, including M&A activity, bond and high-yield offerings and so forth. PWC now sees global M&A deal value reaching $4 trillion in 2026, up 13% year over year and the strongest year since 2021, with megadeals over $5 billion nearly half of that total value. As we’ve heard from BofA and others, trading volumes have also been quite favorable given market volatility. That keeps us upbeat on Morgan Stanley, especially as the company approaches its goal of $10 trillion in assets under management for the Wealth and Investment Management business. During the company’s presentation at the Morgan Stanlry US Financials Conference in early June, management said it is open to expanding its footprint with additional bolt-on acquisitions as it leverages its integrated firm structure. In late June, following the Fed’s latest stress tests, Morgan announced a 15% increase to its quarterly dividend, which puts it at $1.15 per share. Alongside that announcement, the company’s board reauthorized a multiyear common equity share repurchase program of up to $20 billion, without a set expiration date. Looking at the MS chart, we still see several gaps that were created in April, but we also see higher levels of potential technical support. This tells us MS shares are more likely to be driven by fundamental news near-term. That means our focus will be on transaction activity in the coming weeks, and outlooks served up by competitors, such as JPMorgan Chase and Goldman Sachs when they report their quarterly results. 

June Price Change: 0.5%; Yield: 2.2%

INVESTMENT THESIS: Morgan Stanley reports in three business segments: Institutional Securities (42% of trailing 12-month revenue, 38% of trailing 12-month Income Before Tax), Wealth Management (48%, 55%), and Investment Management (10%, 6%). While the IPO window has yet to reopen, the potential IPO class for 2025 continues to build with recent additions including Klarna and StubHub. That would be a boon to private equity firms and others that have been nursing IPO candidates during the dark period and a positive for Morgan Stanley’s investment banking business. Expected deregulation under the Trump administration is a potential catalyst for Morgan’s M&A business. Meanwhile, folks continuing to be behind in retirement savings bodes well for Morgan Stanley’s wealth management business in the coming quarters, while continued market volatility bodes well for its equity trading business.

Target Price: $225; Rating: Two

Checkpoint: $180

RISKS: Market and interest rate risk, credit risk, country risk, and operational risk, including cybersecurity.

Paccar Inc PCAR; $120.12; 1,080 shares; 2.09% Sector: Industrials

UPDATE: After adding Paccar (PCAR) to Portfolio’s Bullpen on June 3, we called it up to the Portfolio on June 11, and added shares on June 15 and again on June 18. Over the ensuing weeks, Paccar shares climbed, closing out June up 2% from our blended cost basis of $117.64. As we explained in those Alerts, our play with PCAR shares lies at the intersection of looming EPA regulations that are driving a pull forward in demand before they phase in next year, bonus depreciation allowed under the One Big Beautiful Bill, and the age of the existing heavy-duty truck fleet. New truck orders have continued to strengthen, with May Class 8 orders up 103% year over year and 12% month over month. That marks the sixth straight month of year-over-year growth. In the coming quarters, we should see the operational leverage tied to rising production levels drop to the company’s bottom line. That’s the opportunity we are looking to capture with this Portfolio position. As we enter July, we will be eyeing the April truck tonnage data as well as the preliminary heavy truck order data for June from ACT Research. We will continue to build the Portfolio’s PCAR exposure opportunistically, but we will also remind you that the likelihood of demand for new trucks cratering as the new EPA mandate goes into effect with the new model year for trucks. This means the life span of our exposure to PCAR shares is likely measured in quarters, not years. 

June Price Change: 2.1%; Yield: 1.2%

INVESTMENT THESIS:  Paccar is a multinational company that reports in three operating segments: Truck (68% of sales), Parts (24%), and Financial Services (8%). PACCAR’s heavy-duty and medium-duty trucks are marketed under the Kenworth, Peterbilt, and DAF nameplates. Key factors affecting the Truck segment earnings include the number of new trucks sold in the markets served and the margins realized on the sales. The Portfolio’s play with Paccar shares is the pull forward in truck demand ahead of the EPA 2027 mandate that will result in tougher 2027 NOx engines regulations and add ~$10,000 to the cost of truck. Helping soften that blow, business owners and owner-operators can utilize 100% bonus depreciation (restored by the One Big Beautiful Bill Act) or Section 179 expensing to write off the entire purchase price of a qualifying heavy commercial vehicle, including new Class 8 and Class 5-7 trucks. With data from ACT Research finding the average age of a U.S. Class 8 tractor is 6.3 years, the highest in more than a decade, the ability to fully depreciate a new truck in its first year is likely a factor helping to drive replacement demand. The pull forward in demand should drive favorable operating leverage inside Paccar, and that is what we aim to benefit from by owning the shares. 

Target Price: $135; Rating: Two

Checkpoint: $95

RISKS: Commercial truck demand, competition and industry pricing, inflation, and interest rate risks.

TJX Companies TJX; $151.50; 1,170 shares; 2.86%; Sector: Financial Services

UPDATE: Shares of TJX Companies (TJX) were down 2% in June, leaving them a modest drag on the Portfolio’s Q2 2026 performance. However, given the prospect we see for inflation pressures that will weigh on consumer disposable income and therefore spending, as we get ready for the shopping-heavy second half of the year, we remain bullish on TJX shares. We’d remind you that because TJX sources its goods through liquidations of excess inventory, brand closeouts, overruns and order cancellations, its exposure to tariffs is smaller than other retailers. When TJX reported its latest quarterly results, it included comp sales of 6%, well ahead the majority of other retailers. For the current fiscal year that ends in January 2027, TJX increased its consolidated comparable sales outlook to a rise of 3% to 4%, from its prior forecast of 2%-3%. With renewed inflation tailwinds, we suspect even that increased outlook is likely to prove conservative. Paired with an upward revision for its pretax profit margin, management also boosted its full-year EPS outlook to $5.08 to $5.15 from $4.93-$5.02. In response, we bumped our TJX price target to $185 from $180. We continue to monitor consumer spending and inflation data as a potential springboard to revisit that new target in the months ahead. During the April quarter, TJX repurchased 3.8 million shares for a total price of $604 million, which implies an average cost basis near $159. That makes our May TJX buy executed at $150.47 look even better. TJX stepped up its buyback intention for the current year to $2.75 billion-$3 billion, $250 million higher than the range shared back in January. In early June, TJX declared its next $0.48 per share quarterly dividend will be paid on September 3 to shareholders of record on August 13. With just over 3% of the Portfolio’s assets in TJX, we have some room to add to that exposure and that has us eyeing support near $152.

June Price Change: -2.1%; Yield: 1.3%

INVESTMENT THESIS: The TJX Companies is the leading off-price apparel and home fashions retailer in the United States and worldwide. It has over 5,200 stores and six branded e-commerce sites that offer a rapidly changing assortment of quality, fashionable, brand-name, and designer merchandise at prices generally 20% to 60% below full-price retailers’ regular prices on comparable merchandise. The company operates in four segments: Marmaxx and HomeGoods, both in the U.S.; TJX Canada, and TJX International. TJX looks to capitalize on opportunities to acquire merchandise at substantial discounts that regularly arise from the production and flow of inventory in the apparel and home fashions marketplace. These opportunities include, among others, closeouts from brands, manufacturers, and other retailers; special production direct from brands and factories; order cancellations; and manufacturer overruns. We see that positioning TJX extremely well, as consumers feel the pinch of ongoing inflation pressures and their efforts to stretch the disposable spending dollars they do have, including tapping discounted shopping locations. When TJX reported its January 2026 quarter, management shared plans to grow the company’s footprint. During the May 2026 earnings call, management signaled they are actively evaluating raising their long-term store count target beyond 7,000, pointing to adjacent markets and new ventures. Exiting the April 2026 quarter, TJX’s total store count stood at 5,262 locations. 

Target Price: $185; Rating: Two

Checkpoint: $140

RISKS: Operational, strategic buying, and competitive risks, as well as consumer spending patterns.

United Rentals URI; $1,132.89; 200 shares; 3.66%; Sector: Industrials

UPDATE: Building on the aggregate gains posted in April and May, shares of United Rentals (URI) climbed double-digits in June, leaving them up 55% in Q2 2026 and 40% YTD. When Caterpillar reported its Q1 2026 results at the end of April, it cited a favorable outlook for non-residential construction backed by continued spending tied to the Infrastructure Investment and Jobs Act, critical infrastructure programs and data centers. Our comment at the time was that those tailwinds bode well for rental fleet activity as United’s business moves deeper into its seasonally strongest time of the year. We’ve seen that play out in monthly construction spending data, especially for non-residential construction activity. In its latest economic forecast, the American Rental Association (ARA) indicates that the combined U.S. construction and industrial equipment (CIE) and general tool rental industry is projected to increase by 3.6% in 2026, totaling $83.5 billion. This is an increase from last quarter’s projection of a 2.8% increase in 2026, totaling $82.9 billion. With the May Construction Spending report in hand, our next set of data points to track will be Q2 2026 quarterly results from construction and construction equipment companies like Caterpillar, Terex, Jacobs Solutions, Flour, and Construction Partners. We’d remind folks about United’s commitment to repurchase another $1.15 billion in stock between April and December. 

June Price Change: 13.8%; Yield: 0.7%

INVESTMENT THESIS: United Rentals, the largest equipment rental company in the world, operates throughout the United States and Canada and has a limited presence in Europe, Australia, and New Zealand. It serves industrial and other non-construction, commercial (or private non-residential) construction, and residential construction. Industrial and other non-construction rentals represented approximately 50% of rental revenue, primarily reflecting rentals to manufacturers, energy companies, chemical companies, paper mills, railroads, shipbuilders, utilities, retailers and infrastructure entities; commercial construction rentals represented approximately 46% of rental revenue, primarily reflecting rentals related to the construction and remodeling of facilities for office space, lodging, healthcare, entertainment and other commercial purposes; and residential rentals around 4% of revenue. We see the company benefiting on three fronts — the seasonal uptick in construction spending, the release of funds and projects associated with the five-year Biden administration infrastructure bill, data center construction and other re-shoring projects, and the company’s nip-and-tuck acquisition strategy that should further enhance its geographic footprint. From a technical perspective, the next layer of meaningful support clocks in near $870, and should we see the shares fall to that level, it would prompt some reconsideration of our Two rating. 

Target Price: Reiterate $1,100; Rating: Two

Checkpoint: $865

RISKS: Industry and economic risk, competition and competitive pressures, and acquisition risk.

Welltower Inc. WELL; $226.97; 640 shares; 2.34%; Sector: Real Estate

UPDATE: Welltower (WELL) more than recovered from their May slump as the shares powered ahead by more than 10% in June. That move led the shares to finish Q2 2026 up almost 15%, leaving their year-to-date gain at more than 22%. Measured against the S&P 500’s performance in H1 2026, that makes WELL a very nice contributor. We’ve continued to receive data points and signals that point to the growing senior housing shortage as the Silver Tsunami grows. We view Welltower as well-positioned for the intersection of that demographic shift and the shortage of senior living capacity that is expected to persist for the next several years. That combination bodes well for favorable pricing action, which we saw in Q1 2026 with the Senior Housing portfolio comp revenue up 9.5% year over year. That strength led Welltower to increase its 2026 guidance for net income (NI) attributable to common stockholders of $3.24 to $3.38 per share and normalized Funds from Operations (FFO) of $6.21 to $6.35 per diluted share, up from its early February NI guidance of $3.11-$3.27 per share and FFO of $6.09-$6.25. What we like even more is the move by Welltower to focus its business on senior housing by exiting its outpatient medical assets. Welltower has made considerable strides on that front and is tracking to have that disposition wrapped up by mid-2026. In Q1 2026, the senior housing operating portfolio comprised 74% of Welltower’s net operating income (NOI), up from 57% in the year-ago quarter. This suggests we should see a quicker pace of overall SSNOI growth as senior housing becomes an ever-larger part of the pie in the coming quarters. To that, we can add word of an expected fresh dividend increase that came in early June. Management shared it expects to raise its quarterly dividend to $0.85 per share, but no specific dividend-related dates were announced. Most likely those details will come when Welltower reports its Q2 2026 results in the coming weeks. What we learn may give us cause to revisit our current price target.  

June Price Change: 10.5%; Yield: 1.3%

INVESTMENT THESIS: Welltower, a real estate investment trust (REIT), owns interests in properties concentrated in major, high-growth markets in the United States, Canada, and the United Kingdom, consisting of senior housing, post-acute communities, and outpatient medical properties. We see the company benefiting from the intersection of the demographic shift that is the aging population and the looming pain point that is the shortage of inventory for senior housing, which fell below 1% in Q2 2025, according to the National Investment Center for Seniors Housing & Care. Over the next five years, more than 4 million boomers will hit age 80, and that’s in addition to the roughly 4% of the U.S. population that is 80-plus years old in 2024. As this demographic shift unfolds, we should see a relatively steady growth rate in Welltower’s revenue, NOI, and FFO, which, in turn, given its REIT status, should drive its payable dividend stream higher. Because of the favorable demographic tailwind and lower interest rate path telegraphed by the Federal Reserve, which should reduce construction costs over time, as well as bring REIT stocks back into favor, we intend to be long-term holders of WELL shares. Our plan is to build the position size methodically, increasing the Portfolio’s dividend stream along the way.

Target Price: $230; Rating: Two

Checkpoint: $190

RISKS: Operational risk, operator and tenant risk, competitive risks, and acquisition risk.

Waste Management WM; $222.88; 795 shares; 2.86%; Sector: Industrials

UPDATE: Shares of Waste Management (WM) clawed back much of the ground they lost in May rising more than 5% in June. For us, the core story of inelastic pricing power and leveraging the combination of automation and cost containment at the core WM business remains in place. Earlier this year, management targeted an increase between 5.4%-5.8% for the waste business. An average price increase of 3% is also targeted for the Healthcare Solutions business. That suggests we should continue to see robust operating cash flow and free cash flow, especially given the pickup in manufacturing and industrial activity. We also see WM’s non-residential business benefiting from non-residential construction activity. During a presentation at the 46th Annual William Blair Growth Stock Conference in early June, WM management discussed 2026 as a year of harvesting investments made in the last few years. With that in mind, the team sees a 46% to 47% free cash flow conversion for this year with a pathway to improve that over time. Management also reiterated its focus on profitable residential routes and that means we should expect to see some additional culling of less profitable ones in the future. As it does that, it plans on leveraging the 4,000 and growing medical waste routes it has, which has a greater competitive moat compared to residential trash. Management also discussed its automation efforts, from trucks to processing facilities, which is another avenue for it to wring out costs from its existing structure as well as from acquired companies. This along with disciplined pricing points to a steady climb in profits and bottom-line earnings in the quarters ahead, and that keeps us bullish on WM shares. Should we see a pickup in economic activity, that would be another positive lever for Waste’s business. 

June Price Change: 5.4%; Yield: 1.7%

INVESTMENT THESIS: Waste Management’s revenue by reportable segment is 61% collection, 21% disposal, 10% healthcare solutions, 6% recycling, and 2% renewable energy. AS you can see, the core business is the inelastic waste removal business for residential, enterprise, and other customers.  The company has built its footprint through a series of acquisitions and excelled at wringing costs out of them, driving free cash flow, dividends, and funding incremental acquisition activity. While the residential business is sticky, the commercial business should continue to benefit from non-residential construction activity. Margins should continue to inch higher due to disciplined pricing and increasing use of automation. We are in the early days of WM Healthcare Solutions, but we see the business growing as management integrates and cross-sells against its core business and flexes the ability to integrate nip-and-tuck acquisitions as it has at the core waste business. Here, too, we see room to consolidate a fragmented industry, which makes this a natural fit for Waste Management. 

Target Price: $255; Rating: Two

Checkpoint: $200

RISKS: Industry and economic risk, competition and competitive pressures, and acquisition risk.

Not Rated

EPS All-Stars Model; 4.75%; Sector: N/M

UPDATE: On June 30, we commenced the first part of the quarterly reconstitution process for the EPS All-Stars basket the Portfolio held since April. That meant trimming back the Portfolio’s exposure to Micron (MU) and Bloom Energy (BE) to prepare for the new basket’s starting position size of 0.75% of the Portfolio’s assets for each holding. We also closed out positions in Credo Technology (CRDO), and Hudbay Minerals (HBM). For Q2 2026, that basket climbed more than 66% compared to the S&P 500’s rise of 14.9%. On July 1, we reconstituted the strategy’s basket for Q3 2026, and in keeping with that higher starting position size at the start of Q3 2026, we upsized the Portfolio’s positions in Ciena (CIEN), Eldorado Gold (EGO), Lumentum Holdings (LITE) and Rocket Companies (RKT). We also started new positions in SiTime Corp. (SITM) and Seagate Technology (STX). Given the nature of the model, the only time we may adjust its composition during the quarter is if a company is acquired. Otherwise, the model is set until the next reconstitution. As such, there are no price targets or ratings for each of the positions that make up the basket. That same selection process will be repeated quarterly, which means housekeeping for the model should be minimal. It also means you can expect minimal activity to occur at quarter-end and the start of the new quarter. The next reconstitution cycle for the EPS All-Stars model will be September 30 and October 1. At that time, we may consider further increasing the Portfolio’s exposure to the basket.

June Price Change: 34.7%

INVESTMENT THESIS: EPS All-Stars is a basket of large-cap companies that offer the fastest rate of EPS growth over a multi-year period. That basket is screened regardless of industry sector or sub-sector, which means the down-selected list of companies can span a wide array of sectors. The focus is on earnings growth because earnings growth is often seen as a signal of a company’s competitive strength, operational efficiencies, and future growth potential. Shares of companies that provide historically consistent earnings growth faster than the stock market receive premium valuations compared to those awarded to the S&P 500. And as we’ve often discussed with you, multiple expansion paired with earnings growth tends to drive outperformance relative to the market, better known as alpha. The basket of eight stocks is reconstituted on a quarterly basis to reflect updated EPS expectations for the current year and the following one.

Target Price: N/M

Checkpoint: N/M

RISKS: Macro and end-market risk, individual company risk, and consensus EPS expectations.