FinksDaily
Sponsored by BluSky AI
⚡ Cloud wars
Good morning. Americans aren’t letting tighter budgets kill spooky season. Costumes and decorations are still making it into carts (opens in a new tab), while last year’s outfits are getting another run. The National Retail Federation finds that Halloween shoppers are starting earlier, chasing deals, and getting creative with what they already have. It’s the same trade-off consumers have made all year: keep the fun, trim the splurge. Shoppers still want the thrill, just without a bill that comes back to haunt them.
Top Idea
AI Made Neoclouds a Hot Trade. Their Debt Has Wall Street Divided
The cloud’s scrappy new cousins are getting a seat at the grown-ups’ table. Neoclouds have ridden the AI boom by renting out the computing power everyone suddenly wants. But as demand and debt climb together, Wall Street is split on whether they’re the boom’s biggest winners or most leveraged casualties.
Picking both horses: Neoclouds rent out the high-powered chips and computing capacity companies need to build and run AI. That demand has put CoreWeave and Nebius Group on Wall Street’s radar, with William Blair initiating coverage (opens in a new tab) of both at Outperform. The firm sees scale as the edge, arguing bigger players can absorb rivals and use hyperscaler contracts to eventually turn junk-grade credit into investment-grade financing.
- Global neocloud revenue could grow from ~$25B in 2026 to $200B–$300B by 2031, putting the industry on track for an eightfold to twelvefold expansion.
- ARK Invest bought ~255K CoreWeave shares Tuesday, adding another vote of confidence from a major growth investor.
The Bears Want To Short The Whole Basket
BCA Research sees a shakier business underneath the AI boom. Chief strategist Noah Weisberger argues neoclouds are borrowing heavily to compete in what could become a commodity market, leaving them at risk of “destroying capital” (opens in a new tab). Meanwhile, hyperscalers like Microsoft and Alphabet generate returns well above their cost of capital.
- BCA recommends an 80% long position across four hyperscalers against a 20% short basket of six neoclouds, betting established cloud giants will come out ahead.
- CoreWeave’s 28% July slide shows how volatile the neocloud trade can get when investor sentiment turns.
Rebranding the label: CoreWeave itself wants out of the category. It serves companies like Caterpillar, Capital One, and Nasdaq, with most revenue coming from AI cloud products rather than raw Nvidia GPU access. The company is pushing further into software with Forge, development tools (opens in a new tab), and says 82% of customers use at least three products. Product chief Chen Goldberg calls the neocloud label “temporary and without a purpose.” Call them whatever you want, investors still have to decide what the business is worth.
(opens in a new tab)Sponsored by BluSky AI
This AI Infrastructure Company Works For The People, Not Against Them
Communities across the country are pushing back on big data centers. Traditional facilities drain local water supplies, strain power grids, and require large land footprints. That resistance is slowing an already constrained AI infrastructure buildout.
BluSky AI is one of the few companies addressing community concerns while keeping infrastructure builds moving forward (opens in a new tab). Their SkyMod pre-fab AI compute centers are scheduled to deploy 3x faster, fit onto smaller footprints, use less power, and near-zero water.
This solution earned them a “Buy” rating from a 3rd party analyst and an estimated fair value of $15.81. Publicly traded on the OTCQB, this company’s common shares have closed as high as $13. But you can invest today at $5.50/share (opens in a new tab).
Large-Cap Recap
Homebuilders Find a Floor
Mortgage rates climbing above 7% have strained housing affordability, pushing September price cuts to their highest share since 2018. That pressure has weighed on major housing stocks, including Lennar and KB Home, alongside home improvement retailers Home Depot and Lowe’s. Builders have increasingly relied on costly mortgage rate buydowns to sustain sales, sacrificing profit margins as rising borrowing costs offset national asking price declines. [Read (opens in a new tab)]
DoorDash Expands Beyond Food Delivery
DoorDash is moving deeper into retail by partnering with major brands like Macy's to offer rapid delivery on clothing, beauty products, and home goods. That expansion puts DoorDash in direct competition with retail giants Amazon and Walmart. To support the shift, the company introduced doorstep return pickups and restaurant operating software. While these additions broaden its market reach, their ultimate success depends on driving repeat customer orders and improving profit margins. [Read (opens in a new tab)]
Memory Stocks Derate Despite Record AI Demand
Micron Technology posted fourth-quarter revenue of $54.23B and adjusted earnings of $33.42 a share, beating Wall Street estimates. That performance was driven by surging AI data center demand for memory chips. The company guided first-quarter revenue to roughly $61.5B, beating analyst projections. Despite that explosive growth, memory stocks trade at single-digit forward earnings multiples as investors question how long the cycle can last. [Read (opens in a new tab)]
Market Pulse
Firefly Aerospace Inc.
The space company’s shares jumped after signing a deal to demonstrate AI computing around the moon, expanding its role in space infrastructure.
Mattel, Inc.
The toy maker’s shares sank after CEO Ynon Kreiz left to join Paramount, raising fresh uncertainty around Mattel’s leadership and future strategy.
Cerebras Systems Inc.
The AI chipmaker’s shares fell as a 19.4M-share lockup expiration opened the door to fresh selling pressure from early investors.
Sponsored by BluSky AI
The House is Cracking Down on Big Data Centers
Massive data centers are being forced to pay the grid. The House just passed a rare bipartisan vote that makes data centers pay for grid upgrades they trigger instead of passing the cost to homeowners. It's aimed at the traditional data center model that strains the grid and drives up electricity bills.
But BluSky AI is unique (opens in a new tab). As a solution to industry bottlenecks, their pre-fab, modular, small-scale AI compute centers fit into smaller footprints, use stranded power and near-zero water, so they aren’t affected by this legislation.
Markets & Economy
US private employers add 90K jobs in September: Hiring beat consensus estimates and snapped a three-month decline as education and health services led gains. Base pay rose 3.2% year over year while gross pay climbed 4.7%. [Read (opens in a new tab)]
US economic growth gets upgraded: Second-quarter GDP growth was revised higher to a 2.2% annualized rate from 1.5%, helped by stronger consumer spending and business investment. Consumer spending grew at a 3.8% pace. [Read (opens in a new tab)]
Lilly’s obesity combo tops tirzepatide: Eli Lilly’s experimental obesity drug combination delivered 23.3% average weight loss over 48 weeks, versus 14.8% for tirzepatide alone. The company plans to begin Phase 3 testing by year-end. [Read (opens in a new tab)]
Business & Tech
Stellantis reaffirms guidance amid historic drop: Stellantis CEO Antonio Filosa reaffirmed the automaker's 2026 financial guidance despite US shares hitting an all-time low. The company is facing net tariff headwinds of up to $1.36B for the full year. [Read (opens in a new tab)]
Boeing secures $20B Navy fighter contract: Boeing landed a multi-billion dollar deal to develop the Navy's F/A-XX sixth-generation fighter. The agreement makes Boeing the sole supplier of advanced tactical jets for both the Navy and Air Force. [Read (opens in a new tab)]
ACA refunds send $500 checks to 1M Americans: The Trump administration is sending $500 refund checks to roughly 1M Americans who were overcharged through ACA marketplace user fees. The payments will be sent automatically to eligible recipients. [Read (opens in a new tab)]
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Digit of the Day
Bullish Sentiment Falls to 50.4% as Fed Rate Fears Return
Investor mood has turned with the leaves. According to our latest Bear & Bull survey, only 50.4% of readers are bullish heading into October, down from 55.6% a month ago. The shift comes as the Fed’s first rate hike since 2023 (opens in a new tab) has added another reason for caution, with traders pricing in three more quarter-point moves by March.
- The S&P 500 rose in six of the past 12 months, with the index declining 0.45% in September while the tech-heavy Nasdaq 100 rose 3.2% during the same period.
- October hike odds hit 70% on Monday, with Governor Michael Barr warned that tariffs and the Iran war had “knocked us off course.”
Foward-looking: In 93% of years since 1957, the S&P 500 has finished above its October low. That history offers some reassurance as investors weigh sticky inflation and the prospect of another rate hike. Crash fears look less convincing, too, with Harvard’s Xavier Gabaix putting the odds of a 1987-style drop at just 0.06% (opens in a new tab) and saying “there’s no special reason” October should be worse. The Fed’s Oct. 27–28 meeting will put that confidence to the test.
Sponsor
The Holiday Rush Is Coming. Which Retail Stocks Offer the Best Value?
As the holiday shopping season approaches, consumers are keeping up their spending while setting aside less in savings. August purchases grew faster than income, raising questions about how long retailers can count on that pace.
Why it matters: For Walmart, Target, and Dollar General, discounts can bring in shoppers while reducing profit per sale. Look for rising customer traffic alongside steady margins, then weigh those gains against the valuation. Even a strong holiday season may offer little upside if investors have already priced it in.
Ask Finks: Compare retail stocks to find the best value this holiday season. (opens in a new tab)
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Disclosures
This is a paid advertisement for BluSky AI Regulation A offering. Please read the offering circular at invest.bluskyaidatacenters.com (opens in a new tab)
*BluSky AI, Inc. has paid FRC a fee for research coverage and distribution of reports.