Market · No. 3

Mon, Oct 5, 2026

Highlights

Mixed

Premarket QQQ -15bp; software +2%, PTC +35% (Schneider acquiring it for $205 per share in cash, a 42% premium, totaling roughly $23.7 billion), with PCOR and ADSK following at +5%; INTC -4%, TSM +2% (Musk confirmed TSM is in talks with Terafab); CBRS +4.5%, MELI +5.5%
Asia overnight: Nikkei +2.4%, Taiwan Weighted +2.55%, TOPIX +1.33%; South Korea and mainland China closed; ZS and MRVL investor days this Tuesday
STX/WDC: Bernstein, TD Cowen, and Evercore ISI all view concerns over Toshiba HDD capacity expansion as overstated (Toshiba's exabyte share rising only to roughly 16.8%/13-14%) and reiterate bullish views
BNP: NVDA price target $285→$345; ARM price target →$405 (fiscal 2031 AGI CPU sales raised to over $23 billion); AMD price target →$960; GFS downgraded to Neutral, price target $51
Other: Melius upgrades MSFT to Buy, price target $665; Piper says agentic commerce is driving migrations to SHOP and GMV growth, price target $180; Mizuho estimates CBRS's fast-inference TAM at roughly $550 billion in 2030, price target $300

PTCNVDAAMDARMMSFTSTXWDCCBRS

Mixed

QQQ +88bp, closing near session highs; software led at +1.2%, with Schneider's $205-per-share cash acquisition of PTC supporting vertical software (ADSK +4.5%, TTAN +7.6%); SHOP +5.8%, NET +3%
Semis gained just +10bp: AVGO and NVDA each +2.1% (Morgan Stanley sees them as insulated from AI power shortages; NVDA hit a record high); NBIS -4.2%, WULF -4.5%, IREN -3.1%; INTC -2.6% (Musk confirmed TSM is in talks over Terafab)
HDD stocks rebounded: WDC +6.3%, STX +4.5%, as sell-side analysts see limited impact from Toshiba's $380 million investment; CBRS +9.1%
Macro: the 10-year yield touched roughly 5.35% (highest since 2002), closing around 5.31%; the 2-year yield was roughly 4.84%; ISM services 54.9 (prior 55.4); nonfarm payrolls +29,000 (expected 85,000-90,000); odds of a 10/28 rate hike roughly 21%, and another hike by December roughly 75%
WTI -2.3% to roughly $89, BTC around $85.7K; FOMC minutes and the 10-year auction Wednesday, 30-year auction Thursday

NVDAAVGOWDCSTXINTCCBRSSHOPPTC

Neutral

BofA Securities (Savita Subramanian et al., 10/5) says the "easy money" in capex over consumption has been made; industrials' weight relative to consumer discretionary is near an all-time high, holdings in AI-disrupted sectors (IT services, software, consumer finance) are near record lows, and staples' weight relative to discretionary has surged
The bank sees scope for a selective rotation: underestimating U.S. consumer demand is risky, while more of the capex theme may already be priced in
Neutral on TMT (recently upgraded communication services to Market Weight), with large-cap TMT risk/reward fairly priced; AAPL and MSFT remain core holdings (held by >80% of funds, with slight underweights)
Active funds' holdings outside the S&P 500 are roughly 15%, near record lows; cash holdings are low, and ADRs account for roughly 2%
Healthcare is returning to generalist funds' radar: policy risk remains key, but crowding is low (roughly 10% overweight, versus nearly 20% before the previous two adverse policy shocks)
Tax-loss selling has begun but is not over: October is the peak month for institutional selling, and stocks in this screen have fallen roughly 6 percentage points since its release last month; historically, October is the weakest month, so stay flexible—sell now and buy back no earlier than November

AAPLMSFT

Mixed

The Information: Microsoft's internal Anthropic spending, originally projected at at least $1 billion, has been cut by more than one-third after employees were told to use Claude less (excluding customer spending through Microsoft tools)
Meta's Claude Code users fell from about 60,000 to about 30,000, partly due to spring layoffs of about 10% of its 78,000 workforce, but mainly due to in-house Muse Code (6000+ users) and MetaCode (30,000+ users); Claude Code spending exceeded $105 million over the past 28 days
Meta initially built its consumer Muse agent with Claude, but last month's release switched to its own model; Zuckerberg established Meta Enterprise Platform to target enterprises
Microsoft is cutting Claude Code subscriptions and steering users toward in-house tools; 'Auto' mode defaults to lower-cost OpenAI models
Anthropic context: annualized revenue reportedly exceeded $65 billion in July; two customers accounted for nearly one-quarter of revenue last year; about 6000 customers spend ≥$100,000 annually, and 1000+ spend over $1 million
Surging costs are also pushing customers such as Cognition to seek cheaper alternatives

METAMSFT