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Most of the Market’s Biggest Stocks Are Lagging. AI Is Keeping the Rally Going

The market’s heaviest hitters have spent a lot of time on the sidelines. Megacap tech gets much of the credit for pushing indexes to records, but most of the giants are actually lagging. With earnings season days away and bond yields at 24-year highs, that gap matters.

Leaders in name only: Just four of the 13 companies worth at least $1T have outperformed the S&P 500 (opens in a new tab) this year. Memory and AI chip demand did the heavy lifting, while the rest of the club clustered around or below the index. "For a cohort that has supposedly led, the [year to date] performance of the individual members hasn't been very impressive," Bespoke Investment Group analysts wrote.

Micron has surged nearly 275% and Advanced Micro Devices just over 200% on AI chip demand.
Nvidia is up nearly 30% and Apple ~23%, against a 14.4% gain for the index.

Trouble Under the Hood

The equal-weighted S&P 500 sits more than 5% below (opens in a new tab) its record high, while only a third of constituents have rallied since the September low. Goldman Sachs expects AI infrastructure names to deliver over half of the index’s third-quarter EPS growth, while rate-sensitive corners keep sliding. Bank of America analysts warn that “low breadth is a classic feature of bubbles building and typically doesn’t stop until they pop.”

The utilities sub-index is down 7.5% since August, while consumer discretionary has fallen ~3% as higher yields weigh on rate-sensitive sectors.
The Russell 2000 has fallen more than 9% (opens in a new tab) from its record, nearing correction territory as higher borrowing costs put more pressure on small-cap balance sheets.

The catch-up trade: Bespoke flags six trillion-dollar names as overbought, including Meta Platforms, Microsoft, and Tesla. Barron’s technical analyst Doug Busch is less concerned, arguing that “strong stocks often keep getting stronger when a firm trend is in place” and forecasting Apple could reach $400 by early 2027. The bigger threat may be the 10-year yield, which has climbed to its highest since early 2002. If borrowing costs keep rising, the four winners may struggle to carry the other nine.

The NVIDIA-Collaborator Robot Flipping the $1T Market You Use Every Day

We all see robots flipping (literally!) on social media. But a french-fry-making robot named Flippy? What?

Miso Robotics (opens in a new tab) has heard it all before. Just ask operators like White Castle and Carl’s Jr. in the $1T fast-food market deploying Miso’s Flippy fry station robot, and it makes a lot more sense.

Flippy flips restaurant operators’ bottom lines, boosting profits up to 4X. And with a $4B/year U.S. revenue opportunity at fry stations alone, these fries aren’t small potatoes.

This year, Miso already:

Deployed robots into high-growth verticals like NBA arenas and college campuses
Added big-name customers like Jersey Mike’s, Cinnabon, and Sbarro
Acquired almost 300 patents of a once-SoftBank-backed robotics pioneer
And launched its first restaurant software called Zippy

Miso’s not done either.

Through its unique collaboration with NVIDIA, Miso’s introducing Flippy’s new 3D-vision at a16z’s LA Tech Week, while targeting $1.3M of investment. And it’s making bonus shares available for everyday investors like you (opens in a new tab).

Join Miso’s “$1.3 with Vision 3D” push today. (opens in a new tab)

Large-Cap Recap

Google and Unity Target Roblox With New AI Gaming Tools

Google and Unity Software launched Playground, an AI platform allowing users to build playable games using plain-language prompts. That launch creates direct competition for Roblox by bypassing traditional coding requirements and developer fees. Meta Platforms recently released similar generative gaming tools. Meanwhile, Alphabet offers Playground free in the US, with advanced access tied to Google One subscriptions. Jefferies recently downgraded Roblox to Underperform due to valuation concerns. [Read (opens in a new tab)]

Regulators Target Farm Equipment Practices

Federal regulators launched an inquiry into agricultural machinery manufacturing and distribution practices. That sweep targets major equipment makers including Deere, AGCO, and CNH Industrial. That regulatory pressure arrives just as demand shows signs of recovery after a steep slump. Equipment makers face scrutiny over dealer contracts and repair restrictions. That investigation could complicate an expected market rebound. [Read (opens in a new tab)]

Solar Tariffs and Hardware Pressures Hit Developers

Washington has imposed a 15% import duty and mandatory price floors on foreign polysilicon, cells, and modules to protect domestic manufacturing. That policy shift is raising project costs significantly. Meanwhile, Deutsche Bank lowered expectations for equipment makers like Enphase Energy and SolarEdge Technologies, citing high interest rates and pull-forward demand risks. That combination of new import rules and slowing core growth is weighing heavily on the broader solar sector. [Read (opens in a new tab)]

Market Pulse

Spotify Technology S.A.

The streaming company’s shares surged as its expanding global audiobook business fueled optimism around subscriber growth and another major revenue opportunity.

Webull Corporation Class A Ordinary Shares

The online brokerage’s shares sank after reports of a US national security review raised fresh concerns around its ties to China.

Penguin Solutions, Inc.

The AI infrastructure company’s shares rose after expanding its partnership with SK Telecom to support the carrier’s growing AI data center operations.

Why OpenAI, Anthropic and Grok Should Fear Trump’s “American Atlas”

American Atlas isn’t just another AI program. It could upend conventional data centers and the AI providers built on them, from OpenAI to Anthropic to Grok. Marc Chaikin’s free report (opens in a new tab) reveals the ratings for 3 major AI stocks tied to it.

See their ratings free (opens in a new tab)

Chaikin Analytics Privacy Policy (opens in a new tab)

Markets & Economy

Elon Musk reclaims trillionaire status again: Elon Musk added $65B to his fortune in a single day, pushing his net worth back above $1.04T. The move came as SpaceX shares rebounded from their post-IPO slump. [Read (opens in a new tab)]

Retail giants launch rival October sales events: Walmart and Target kicked off major discount events to challenge Amazon Prime Big Deal Days. Walmart is pulling demand forward with a seven-day window and no paywall requirement. [Read (opens in a new tab)]

Fed officials split on rate path: Minutes from the Sept. 15-16 meeting reveal sharp debate over whether to push rates higher after September's 25-basis-point hike. Meanwhile, weak payroll data has sent October hike odds tumbling below 22%. [Read (opens in a new tab)]

Business & Tech

Baillie Gifford backs CoStar and Duolingo: Asset manager Baillie Gifford expects beaten-down CoStar and Duolingo to recover despite heavy spending and margin pressure. Both companies are positioned for long-term growth as investments in new initiatives begin to pay off. [Read (opens in a new tab)]

Lamb Weston raises outlook on volume growth: Lamb Weston Holdings raised its full-year outlook after reporting Q1 volume growth that outpaced end-market trends. The results highlight a broader shift across packaged foods as companies trade pricing power for shipment volume. [Read (opens in a new tab)]

Microsoft and Nvidia team up for local AI: Microsoft is set to unveil the Surface Laptop Ultra powered by Nvidia hardware at its Oct. 7 event. The machine will run 120B-parameter models on-device, potentially shifting workloads away from Azure cloud data centers. [Read (opens in a new tab)]

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Digit of the Day

Used EV Values Jump 4.3% as Buyers Change Course

The gas pump is now writing the price tags on America's used car lots. Electric vehicle values rose 4.3% annually (opens in a new tab) in September as record diesel prices changed what buyers were willing to pay. Climbing interest rates and steeper-than-usual third-quarter depreciation weighed on the broader market, while fuel-efficient models ran the other way.

Cox Automotive lowered its forecast (opens in a new tab) for the Manheim Used Vehicle Value Index from a 2% increase to just 0.2%.
CarGurus found used hybrid sales climbed nearly 33% (opens in a new tab), with new hybrid sales up 24% year to date.

Pump shock: The split is getting sharper further down the market. Non-electric models getting at least 40 MPG have gained 9.9% in wholesale value since January, while the biggest gas guzzlers have lost 15%. Used EVs are finding another advantage at the cheaper end, with days' supply falling (opens in a new tab) as shoppers hunt for options under $32K. Efficiency is becoming a hedge against depreciation.

Sponsor

Which Undervalued Stocks Are Worth a Second Look?

Even with the market near record highs, bargains haven’t disappeared. Morningstar recently flagged Lockheed Martin and NXP Semiconductors as undervalued, showing that some opportunities are hiding among stocks investors have soured on.

Why it matters: The interesting names aren’t necessarily the stocks that have fallen the most. Look for companies where valuations have reset, but earnings power, cash generation, and long-term growth prospects still give the business room to recover.

Ask Finks: Find undervalued stocks with the strongest rebound potential (opens in a new tab)

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Disclosures

This is a paid advertisement for Miso Robotics Regulation A offering. Please read the offering circular at invest.misorobotics.com (opens in a new tab)