Most important take away

We are in one of the most extraordinary earnings seasons in market history, with S&P 500 profits expected to grow 25.8% year over year (roughly 1,344 basis points above expectations at the start of the season) — driven heavily by AI-related capex and semiconductors. Investors should resist calling a top, but be aware the bar for tech (38% expected forward growth) is now extreme, and Josh Brown puts the odds of a 40% correction in the high-flying memory/semi names at 75% over the next 12 months.

Summary

This episode is loaded with actionable takes for investors. The hosts dissect a remarkable Q1 earnings season and lay out where they see opportunity, risk, and where they personally have money on the line.

Earnings season — the macro setup

• 70.6% of the S&P 500 (by market cap) has reported. Blended earnings growth: +25.8% YoY, the fastest since Q4 2021 and 1,344 bps above start-of-season estimates.
• 81.7% of companies have beat (vs. 5-yr avg of 77%). Revenue growth running at +10.8% — not just margin games.
• Communication services +54%, technology +46.4%, discretionary +38.3%, financials +21%.
• Actionable insight: Stop calling the top. This is the 6th–7th straight quarter of double-digit earnings growth. Don’t get bearish at the start of earnings season.
• Caution: Forward 12-month expectations for tech are now 38% — an extremely high bar.

Stocks called out as winners / strong reports

• Semiconductors / memory: Micron (MU) — went from $320 to $650 in roughly five weeks, revenue up 100% YoY. SanDisk (SNDK) — revenue ~$6B vs $1.6–1.7B a year ago; data-center revenue from $400M to $1.5B. Lam Research (LRCX) — “went completely nuts.” Western Digital, Intel, AMD also flagged as part of a market-cap explosion (collectively $324B → ~$2T).
• Mag 7: revisions +57% since April 24. Earnings ex-Mag 7 still +20%.
• Duolingo: “smashed” earnings.

Stocks called out as disappointing

• Palantir: didn’t get a great response despite strong earnings.
• Shopify: down ~15% on the day, “an absolute mess.”
• Disney: pinned to $100.
• Spotify: “shitty Netflix.”
• Netflix: Josh “regrets buying,” looks “disgusting.”
• Coinbase: announced 14% layoff ahead of earnings — a yellow flag.

Actionable theme #1 — Memory/Semis are euphoric, hedge or trim

• Josh assigns a 75% probability of a 40% drawdown in this group within 12 months. Trigger could be a new LLM release that claims a 20% reduction in memory/compute needs (a “DeepSeek moment”). Implication: if you’ve ridden Micron/SanDisk/AMD/etc., consider taking some profits or sizing down. New money chasing here is high-risk.

Actionable theme #2 — eBay (EBAY) is in play

• Ryan Cohen (GameStop) made a bid for eBay; analysts (Truist, Bernstein, Baird) are universally skeptical the deal closes (financing gap, possible poison pill).
• But the spotlight reveals eBay as a low-multiple, high-cash-flow, low-capex, durable franchise (~$11B revenue, 30 years old, no real disruptors). New Meta/Facebook Marketplace integration is a genuine tailwind.
• Actionable insight: even if Cohen fails, eBay screens as a take-private candidate or another acquirer’s target. Worth a look on the watchlist.

Actionable theme #3 — Robotics / humanoid automation is the next platform

• BofA forecasts humanoid robot shipments to grow from 20K units (2025) to 10M (2035) — 86% CAGR; potential 300M robot population by 2040.
• Josh thinks robots will hit industrial, law enforcement, military, and healthcare first (not the home).
• Actionable name mentioned: Rockwell Automation (ROK) — “all this thing does is go up.” Theme: own picks-and-shovels names tied to industrial automation.

Actionable theme #4 — Berkshire (BRK) post-Buffett

• First post-Buffett annual meeting. Greg Abel impressive, more hands-on operator vs. Buffett’s hands-off style. Stock down 13% over the past year vs. S&P +28%.
• Berkshire is being re-rated — the “Buffett premium” is coming out. Operating earnings strong; Apple position trimmed by ~2/3 (still the greatest stock trade of all time).
• Implication: not a screaming buy yet, but the stock now reflects a cleaner conglomerate discount. Worth tracking for value investors.

Actionable theme #5 — Uber (UBER) ahead of earnings

• Josh is a shareholder, won’t sell. Stock typically falls ~8% on every print. Analyst PTs cluster near $100; stock at $73.
• Bear case priced in: Waymo/Tesla autonomous threat. Bull case: Uber will likely have more autonomous vehicles on its app than any competitor by 2030. New travel/hotel/AI-voice features broaden moat beyond rides.
• Actionable insight: don’t buy ahead of the print, but the longer-term re-rating thesis is intact. Hold or accumulate on weakness if you believe Uber wins distribution in the AV race.

Actionable theme #6 — Housing / renovation as a contrarian setup

• Home Depot (HD), Lowe’s (LOW), Sherwin-Williams (SHW), Pool Corp (POOL), Floor & Decor (FND), home builders all “look like death.”
• If rates ease and mortgage activity returns, these snap back fast. Josh prefers the renovation angle (Floor & Decor) over builders. He owns Rocket (RKT).
• Actionable insight: this is the “before-it-turns” trade. Don’t have to buy today, but be ready — the move will be quick.

Stealth AI play — Zoom (ZM)

• Zoom’s stake in Anthropic (invested 5 years ago) is now worth roughly half the company’s market cap. Stock is effectively trading as an Anthropic proxy. Also flagged: SK Telecom as another Anthropic-stake play.
• Actionable insight: a rare way to get private-AI exposure through a public stock with downside cushion from the underlying SaaS business.

Big-picture investor advice

• The market re-rates faster than ever. “The days of waiting for a pullback” are over — Amazon gapped up 12 points then ran another 30 in two weeks. Catalysts are recognized in minutes, not weeks. Be willing to buy good businesses at fair prices rather than waiting for the perfect setup that never arrives.
• The “AI economy” is now the economy: business investment +10.4% in Q1 (highest since Q2 2023), driven entirely by AI capex while consumer spending grew only 1.6% real. If you are not in the investor class, this wave is a serious problem.

Chapter Summaries

Cinco de Mayo banter & sponsors Quick opener riffing on the history of Cinco de Mayo (Mexican liberation from the French, not Spain), shoutouts to viewers, and reads for Fidelity Trader Plus and Clearbridge Investments.

Earnings season scorecard Deep dive into Q1 2026 earnings: 70.6% of S&P reported, +25.8% blended growth, 1,344 bps above start-of-season estimates, 81.7% beat rate. Sector breakdown, revenue growth at 10.8%, Mag 7 +57% revisions. Hosts marvel that nobody predicted growth this strong; warn that the forward bar (38% for tech) is now dangerously high.

Semiconductor / memory mania Micron, SanDisk, Western Digital, Intel, AMD market caps have collectively gone from $324B to ~$2T. Josh assigns 75% odds of a 40% drawdown within 12 months. Possible trigger: an LLM efficiency breakthrough. New DRAM ETF (DRA) raised $2B in two weeks.

Ryan Cohen’s bid for eBay GameStop’s Cohen offers $56B for eBay (half cash, half stock). CNBC’s Andrew Ross Sorkin presses on a $16B financing gap; Cohen is dismissive. Analysts (Truist, Bernstein, Baird) skeptical. Hosts argue eBay is an underrated, durable, low-capex business — possibly a take-private or alternate-acquirer target.

The AI-driven economy Heather Long’s note: business investment +10.4%, all AI capex; consumer spending tepid at +1.6%. Hosts pivot to robotics — BofA forecasts (20K → 10M humanoid units 2025-2035). Discussion of augmented humans (exoskeletons), industrial robotics opportunity (Rockwell Automation called out).

Berkshire’s first post-Buffett meeting Recap of the Omaha shareholder meeting. Greg Abel more detailed and hands-on; brought business-unit CEOs onstage. Stock down 13% YoY vs. S&P +28% — “Buffett premium” coming out. Apple position trimmed two-thirds; called the greatest single stock trade in history.

Global profits & big-getting-bigger Yardeni chart shows U.S., ACWI, EM, Japan all rising. Top 10 stocks now contribute 33% of S&P earnings. Mag 7 in the “quadrant that shouldn’t exist”: largest companies also fastest-growing. Network effects + lax antitrust = compounding dominance. 10 trillion-dollar stocks now exist; top 5 ($26.5T) equal the bottom 463.

Apple buybacks & SanDisk shocker Apple buybacks at 9% of total S&P buybacks despite being 6% of the index. Share count down from 25B to 14B over a decade. SanDisk revenue up 100% YoY; data center segment 4x. Hosts liken the AI memory demand shift to a “once in a thousand years” event.

Uber earnings preview Uber reports tomorrow; historically falls ~8% on prints. Josh is a shareholder, holding through expected weakness. Discusses Uber’s expansion into hotel bookings (700K hotels via Expedia partnership), AI voice booking via OpenAI, room-service delivery. Long thesis: Uber wins the AV distribution race by 2030.

Make the case — Zoom (ZM) Josh’s pitch: the only software stock on the “best stocks in the market” list, trading as a stealth Anthropic proxy thanks to a 5-year-old investment. SK Telecom mentioned as another Anthropic-stake stock.

Housing / renovation contrarian setup Home Depot, Lowe’s, Sherwin-Williams, Pool, Floor & Decor, builders all look terrible. If rates ease, the move will be sharp and quick. Josh owns Rocket (RKT); prefers Floor & Decor over builders for the renovation theme.

Closing Sign-off, sponsor mentions, and previews of upcoming Animal Spirits, Ask the Compound, and Compound and Friends episodes.