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Why we love this deal

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Dekopro 126-Piece Drill and Tool Set, $50 (was $60) at Amazon

Courtesy of Amazon

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Related: Craftsman’s 26-piece tool set comes with a ratcheting screwdriver and bits for only $16

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Details to know 

Pieces in tool set: 126 pieces, including a cordless driver, measuring tape, long-nose pliers, claw hammer, and more. 

Color options: The tool set comes in seven colors, all of which are on sale for $50.

Average shopper rating: 4.6 out of 5 stars.

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Shop more deals

Prostormer 259-Piece Tool Kit, $80 at Amazon

KingTool 276-Piece Tool Set Kit, $100 at Amazon

Dekopro Tool Kit Box Drill Set, $90 at Amazon

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Walt Disney is doubling down on enforcing a strict requirement for its remote employees that could put their jobs at risk if they don’t follow it.

During the Covid pandemic, Disney permitted corporate staffers to start working remotely to help slow the spread of the virus.

By March 2023, then-Disney CEO Bob Iger began requiring employees to return to working from corporate offices four days a week, but with some exceptions for tech team members. In an internal memo announcing the change, which was unveiled in a CNBC report, Iger emphasized that in-person collaboration is crucial.

“In a creative business like ours, nothing can replace the ability to connect, observe, and create with peers that comes from being physically together, nor the opportunity to grow professionally by learning from leaders and mentors,” said Iger.

Disney scales back in-office policy exceptions 

Since then, Disney has decided to shift gears. The entertainment giant is now expanding its in-office mandate, requiring more corporate employees to work in the office four days a week, according to a new Business Insider report. 

On Sept. 14, Disney reportedly informed some remote product and tech employees, who had previously been exempt from the in-office mandate, that they are now required to comply with it. 

The company is also now threatening to fire employees who fail to work in the office four days a week. Before this change, Disney had allegedly been laissez-faire about enforcing the rule. Some managers would strictly monitor if employees were following it, while others were more relaxed about it. 

Related: Spectrum makes significant decision as customer losses mount

According to Business Insider, Disney’s latest move is intended to reinforce its existing in-office policy, rather than signal a change in strategy. 

Disney’s decision to expand its in-office mandate comes after Josh D’Amaro became CEO of the company in March, replacing Iger, who held the position for nearly 18 years across two separate tenures. 

Shortly after stepping into the role, D’Amaro laid off roughly 1,000 employees in April. In a memo sent to employees announcing the job cuts, which Variety reported, he mentioned that he aims to “streamline” the company’s operations. 

“Over the past several months, we have looked at ways in which we can streamline our operations in various parts of the company to ensure we deliver the world-class creativity and innovation our fans value and expect from Disney,” said D’Amaro in the memo.

“Given the fast-moving pace of our industries, this requires us to constantly assess how to foster a more agile and technologically-enabled workforce to meet tomorrow’s needs,” he continued. 

Disney is reducing remote work by ramping up its enforcement of its in-office policy. Jesse Grant / Getty Images

Disney isn’t the only company reducing remote work

Disney’s in-office policy update also follows the lead of other large U.S. companies, some of which have enforced stricter return-to-office mandates. 

For instance, in March 2025, Dell began requiring employees who live within an hour of an office to return to in-person work five days a week, a move it claims will help the company keep up with the fast pace of tech innovation.

However, its enforcement of the policy wasn’t very smooth as it later had to crack down on employees who reportedly ignored the mandate.

That same month, J.P. Morgan Chase also rolled out a return-to-office mandate requiring employees to work in the office five days a week. 

More Employment News:

Strict Verizon policy leaves customers waiting longer in stores

T-Mobile makes striking workforce shift amid fight for customers

Mark Zuckerberg admits mistakes in leaked memo after Meta layoffs

The updated rule, however, sparked backlash from employees, with some even launching a petition demanding that the banking giant restore its previous hybrid work policy, which allowed them to work from the office three or four days a week. 

In January 2025, AT&T also enforced a return-to-office policy, mandating corporate employees to work in the office five days a week to improve collaboration and innovation. 

It even went so far as to use a tracking system to monitor employees’ in-office attendance. The company later scaled back its use of the system in September that year after employees expressed concerns about its accuracy. 

Many companies nationwide already have plans to reduce remote work this year. According to a survey from ResumeBuilder.com, one in eight companies plan to increase the number of required days in the office in 2026, while three in 10 won’t allow remote work. 

Reasons behind reducing remote work include strengthening company culture, boosting productivity, maximizing office space use and encouraging workers to quit. 

“If hiring slows or layoffs rise in 2026, strict RTO (return to office) policies may clash with broader labor market trends,” said Stacie Haller, chief career advisor at ResumeBuilder.com, in a statement. “Employees may comply short-term, but resentment and turnover will rise once the market rebounds.”

Related: T-Mobile makes striking workforce shift amid fight for customers

Transcript:

Caroline Woods:Joining me now is Justin Bergner, portfolio manager at Gabelli Funds. Justin, thanks so much for being here. Great to have you back.

Justin Bergner:Thank you. Caroline, it’s a pleasure to be back. I know it’s a somber and emotional day for many, but glad to be on your show nonetheless.

Caroline Woods:Yes, we appreciate you being here. Thanks for wrapping up the week with us. Let’s start by talking about CPI, the latest inflation report. Did anything change in the report or did the report change anything in terms of your view for stocks or for the fed?

Justin Bergner:Well, I think for the fed it more or less cements that they will do a September rate hike next week with a bias for a second rate hike in December. The two year yield at 4.6% is certainly reflecting that. And, you know, the fed is sort of torn between this. You know, can we ignore consistently high ish inflation or do we need to tighten against consistently high ish inflation.

Justin Bergner:And so when you get a PPI and a CPI that are slightly hotter than expected, even if it’s very slightly I think it pushes the fed towards you know, being in that we can’t let inflation continue at high levels for that much longer.

Caroline Woods:So we have the market pricing in this rate hike that you you mentioned we have oil sitting pretty close to $100 a barrel. We have yields closing in on 5%. Which of those things worries you the most? Oh and the Iran war of course is in at seven months seventh month.

Justin Bergner:Yeah. I mean, it’s all additive I guess, to some degree. You have the trade war with Cannes and to a lesser extent, other countries. You have the Iran war and higher oil prices. You have the higher yields, reflecting a variety of factors. And you have a challenge consumer. I would say the higher yields probably worry me the most, particularly on the long end of the curve.

Justin Bergner:I think that it creates a tightening. Some of that is due to legitimate factors. We’re seeing, you know, the back, the long end of the curve. The yields are go up around the world. Obviously, the Iran war and the trade war don’t help there. And we’re seeing AI CapEx push yields higher as it competes for capital.

Justin Bergner:But I do think that there was a modest mistake by Warsh in the July Fed meeting, where he complimented the long end of the curve on doing some of the tightening for the market. And that brought out concerns about fiscal deficits and bond vigilantes. And now the fed is potentially forced to tighten a little bit more than it would have had it not let the cat out of the bag in July.

Caroline Woods:So the biggest risk to this market is what.

Justin Bergner:I think the biggest risk is the long end of the curve, I think, because that, just creates government funding concerns. It challenges the consumer. It even makes, you know, AI related CapEx more expensive to fund. Right? Like not all AI CapEx is being funded on the short end of the curve. So I think it’s just a big headwind to the economy in the U.S. and other countries around the world that are also dealing with higher, rates on the long end of their curves.

Caroline Woods:Yeah, we have the S&P 500 up about 1% today, still on pace for a lower week, but rebounding pretty significantly today. Do you think investors are getting too comfortable buying here.

Justin Bergner:Well I think it’s somewhat of a bounce after the last couple of days. We’ll see what happens next week. Obviously there’s a lot going on with the fed meeting. And as you know, everyone fully returns from whatever holidays they might have been still on. I also think that maybe the market is taking comfort in a little bit more clarity about which direction the fed has to go in September.

Justin Bergner:So now that the rate hike is mostly priced in, the market can look beyond that rate hike. And it’s unlikely we will get another rate hike in November. So, you know, perhaps the fed is on hold till December. And that creates a little bit more visibility.

Caroline Woods:So is this a market that can move higher than from here.

Justin Bergner:It’s going to be challenging but it’s not impossible. You know, on the one hand you have tremendous earnings growth greater than 25% this year with low double digit earnings growth forecast for next year. You have a consumer that’s still spending out of savings despite real incomes being flat. But each of those things, you know, has some headwinds of their own, right.

Justin Bergner:Like a lot of the earnings growth is related to earnings from AI CapEx today. That will become depreciation expense for numerous hyperscalers tomorrow and work against earnings in the future. Consumer spending financed by savings can only go on so long. And the big beautiful bill stimulus is in the rearview mirror. So I certainly think that the strength in the market can persist.

Justin Bergner:I remain modestly, defensively positioned, in the funds that I manage because I think there’s more that can go wrong than can go right in the market. It is fairly expensive, but I think as a whole, you know, one is better served by looking at idiosyncratic opportunities than trying to call the market or sectors on a day to day, week to week basis against all this volatility.

Caroline Woods:Well, we’ll talk about how you’re defensively positioned. But let’s dig into that a little bit more. Because you were last on back in March and you sounded more cautious back then. I think your price target was around 7000 for the S&P 500. Have you changed that price target then.

Justin Bergner:Yeah I mean with higher earnings growth, one should you know, lift up their view of the market. I still think that, you know, the market will be hard pressed to end the year higher from here, even if there is, some strength after the election. And, you know, I think that it’s just hard to calibrate what multiple to apply to S&P earnings that are probably being boosted by 10% or more by this mismatch between CapEx today, generating earnings today and the fact that that will lead to depreciation expense that’s materially higher tomorrow and work against earnings in the future.

Justin Bergner:But you know, there’s clearly tremendous earnings strength even when you discount that. And so I do think that a market at current levels can persist for a while.

Caroline Woods:Okay. All right. So let’s talk about what playing defense actually looks like. Tell us the strategy.

Justin Bergner:Well I would continue to kind of argue for a modestly defensive orientation. Part of the challenge is being in being defensive, as you don’t exactly know, what makes for a defensive stock today with the long end of the curve higher that works against, you know, yield oriented stocks have traditionally been defensive like staples, health care and utilities.

Justin Bergner:Moreover, those sectors at least staples and to a lesser extent, health care exposed to the consumer, which is certainly the more challenging part of the economy. So I would argue to modest, defensive, you know, what’s worked for us, you know, year to date in, the Dividend Growth Fund is our large position in Merck. Merck obviously a big winner with its partnership with Moderna in the cancer vaccine.

Justin Bergner:And that just goes to highlight the strong R&D organization that they have in pharma, probably the best in large cap pharma. And the fact that that our R&D organization can meaningfully contribute not just to internal drug development, but to business development through partnerships and M&A. So the stock is run up a lot, but it’s our largest position, is not inexpensive, but the quality characteristics of the company in its R&D organization are certainly coming to the forefront.

Justin Bergner:Other names that we’ve, been, adding to, and have conviction in the name Ferguson Enterprises in the construction arena.

Caroline Woods:Justin, you mentioned that Merck has performing, has been performing well for you. It’s up, though, almost 40% year to date. Is that a hold here or would you still buy it at these levels?

Justin Bergner:Yeah, I think it’s a hold, but I’m, not. I’ve reduced my position some just to not make it to large position against recent strength. But I’m holding, you know, the vast majority of the position as I think it will continue to perform at least in line, if not slightly better than the market.

Caroline Woods:Okay. So it’d be a buy and a pullback kind of play for some of the retail investors listening.

Justin Bergner:Yes. If it was to pull back, you know, 5 to 10%, you know, relative to the market. Yeah, I would certainly look to to add there, I think that, Merck is kind of regaining its status as the highest quality large Cat pharma name, you know, outside of the whole Lilly and GLP one dynamic.

Caroline Woods:Okay. So what else do you like here? What would you add at these levels?

Justin Bergner:Sure. So one name I like in the housing and construction oriented arena, despite having a very kind of sober view of those markets, is Ferguson Enterprises and Ferguson Enterprises has actually, you know, pulled back recently along with a lot of housing oriented stocks. So it is, the largest building products distributor in the country, with a market cap of about 44,000,000,033 billion in sales.

Justin Bergner:And the company is 50% exposed to residential, but more importantly, 50% exposed to nonresidential. And in nonresidential. They’ve been benefiting, from large capital projects, you know, notably data centers. They probably generate, you know, close to 15% of their nonresidential sales, from the data center market today, where they’re supplying a variety of products, and they’ve really been showing outsized success in that market given their scale and scope.

Justin Bergner:And they’ve had a number of attributes which have allowed them to outgrow their markets by 300 to 400 basis points. Mainly the exposure to large capital projects, but also their focus on the dual trade contractors, which is HVAC and plumbing contractors, contractors that do both of that, as well as just good execution in their Ferguson home business.

Justin Bergner:They’ve recently seen our growth on the high end of that 300 to 400 basis points. They are operating well, deploying capital. Well, recently did a $1.6 billion acquisition of Flow Works to expand their presence in, pumps and valves, and that exposures increase our industrial exposure. And I think the stock can generate, $12 of earnings in the next 12 months and grow earnings at a 10% clip from there.

Justin Bergner:Even if the back up in yields slows that earnings growth to something more like 7%, you know, you’re still looking at a stock that can trade, at 20 times earnings, just given their outgrowth capabilities. And be worth $208 18 months from now. So really like Ferguson and what they’re doing just winning in their markets, however tough those markets could, might be right now.

Caroline Woods:Okay, I see you also like Smucker SJM. That one has actually outperformed the market this year. Should note that Ferguson is basically flat on the year whereas Smucker is at more than 20% year to date. So you still like it here even after that Twinkie acquisition?

Justin Bergner:I mean, the Twinkie acquisition was almost three years ago. Caroline. So I like it. As the Twinkie acquisition becomes more rearview mirror for the company. Yeah. So Smucker’s has, you know, one of the better growth profiles in consumer staples. And it’s a good example of a defensive stock that one can find a little bit more motivating in this market.

Justin Bergner:They have a tremendous set of brands across Pat coffee and spreads. Clearly, you know, they have Folgers, they have Cafe Pistola, they have Jif, they have their crust apples franchise. And they recently reported a quarter where they grew sales, you know, 5%, including 1% volume. They took up their sales guy by 200 basis points for the year.

Justin Bergner:The volume growth forecast is now flat, which might not seem great, but it’s better than many consumer staples companies. And they just have a good, you know, set of growing products. Again, in a tough staples market. I think they can do, earnings of about 1050 looking out over the next 12 months, when you look beyond some of the benefit from tariff refunds in the last quarter, and they can grow sales low single digit, mid-single digit.

Justin Bergner:From there, Elliott is involved with to, designated representatives on the board, and the company is deleveraging towards three times EBITDA. And once they get a little bit lower repurchases are not out of the picture. So capital allocation should be a source of strength. Any residual family discount. You know, Mark Smucker CEO, I think will go by the wayside.

Justin Bergner:And the company can trade at 13 times earnings and beat, you know, $150 stock or close to $150 stock 18 months from now.

Caroline Woods:Okay. So staples check. Utilities, check. Healthcare? Check. What about tech? Because I know back in March, at the time we have seen some beaten down I high fliers. You said it was too early to buy them. Then six months later. How are you feeling about tech? Yeah.

Justin Bergner:I we have a value orientation. So we have certainly a more modest tech exposure. We own meaningful positions, in Amazon and Alphabet, which we think will be winners in the LLM world and the, the cloud world. Obviously they’re spending oodles and oodles of CapEx, which has its own concerns. We also, you know, have a position in the fund and Hewlett Hewlett-Packard enterprises, which is having an exceptional day today for reasons that aren’t entirely clear, but, is just a winner in networking.

Justin Bergner:And the juniper acquisition there is going well. So we have some selective exposure in tech. Certainly. Not nothing like what a growth investor might, might have in their fund.

Caroline Woods:Given your value orientation, what would you say is the best value in the market right now, either sector wise or stock wise?

Justin Bergner:I think it’s very idiosyncratic. You know, I think it’s a market with a lot of uncertainties. And so, you know, it’s a market where you don’t take as big bets. You know, I think Ferguson Enterprises is certainly one of those stocks that I feel very confident about the long term value. I mean, if you’re outgrowing your market by 400 basis points, you know, you can still grow when the market’s not not growing or even shrinking.

Justin Bergner:So that would be one example where I think there’s really good value. But I think it’s more idiosyncratic in stock specific than sector.

Caroline Woods:Okay. So if you had to kind of sum up the that the biggest advice for retail investors, as they think about some of the seasonal September weakness that we’ve already seen as they think about heading into the fall into year end, what’s your best piece of advice?

Justin Bergner:My best piece of advice would be to look for stocks that you want to own in the next 3 to 5 years, and if they pull back, even for reasons that might be somewhat deserve it. I mean, Ferguson’s pulling back because housing is weak and interest rates are up. You know, don’t hesitate to add to those positions. I mean, it’s hard to know what the business cycle will bring in the next couple months or the next couple of quarters, the next couple of years.

Justin Bergner:And you want to own good quality companies that can grow revenue and grow earnings and aren’t too expensive. And, you know, manage those positions in your portfolio with an eye towards, you know, long term capital appreciation.

Caroline Woods:And just clarify what a pullback actually looks like. Are you talking 1%, 5%, 10%. What sort of pullback would you be looking for? Obviously if stock specific. But you know kind of broadly speaking.

Justin Bergner:I think broadly speaking you’re looking at a pullback 10% or close to 10%. You know relative to the market or whatever sector index might be relevant. I think that was that’s when you should start being more aggressive. So in the case of Smucker’s, the CEO of Smucker’s did a meaningful insider sale after the stock respond to earnings.

Justin Bergner:And that’s created an opportunity to buy into the stock somewhat lower, or to add to its position somewhat lower, for example.

Caroline Woods:So that works if you’re a stock picker. But as we think about even some of the weakness that we’ve seen this week, and you take a look at the S&P 500 and it’s only down 6/10 of a percent or 7/10 of a percent on the week, despite it feeling like a bad week because of obviously today’s bounce.

Caroline Woods:So is it kind of the strategy just to sit tight then and wait for more weakness. Or is it deploy cash because the market might keep hitting higher and these levels might are good.

Justin Bergner:I think it’s to sit tight. Caroline. I mean, you can certainly justify a much larger pullback in the market than we saw over the last week, given the back up in yields and what that could do to the discounted value of, stocks, future earnings and cash flows. I also think there’s just a lot of volatility ahead in the coming weeks.

Justin Bergner:And, you know, I would just, encourage, you know, folks to be mindful of interest rates and what they mean for the value of all assets. You know, it was in 2000, in the fed funds rate got to 6.5% before the market crashed. So the market may be able to tolerate a number of interest rate hikes, but it just feels that any upside from here is going to be much more of a grind higher than, something more material from a broader market point of view.

Caroline Woods:Okay. I think this is a great point to pivot to our rapid fire round of this or that you’ve played before. Quick questions, quick answers. No hedging. Are you ready, Justin?

Justin Bergner:Sure. Let’s go.

Caroline Woods:All right. Here we go CPI reassuring or concerning.

Justin Bergner:Concerning the.

Caroline Woods:Fed next week. Hike or hold. Hike one fed hike healthy reset or start of a bigger problem.

Justin Bergner:There’s going to be two hikes. I think it’s a needed reset.

Caroline Woods:Hundred dollar oil market killer or manageable headwinds.

Justin Bergner:I think oil by itself is a manageable headwind.

Caroline Woods:Ten year near 5% opportunity or danger zone?

Justin Bergner:Danger zone. I don’t know if it’s next next month or next year, but definitely danger zone.

Caroline Woods:Stocks or bonds at today’s yields.

Justin Bergner:I would argue for bonds. I think that while we are in a long term rising interest rate cycle, the recent moves feel a little bit too far, too fast.

Caroline Woods:Okay, but if you do buy stocks growth or value for the rest of 2026.

Justin Bergner:The value personal always lean towards value. But, I don’t think it’s going to be a huge differential. But I would argue for for value because value is more defensive stocks. And I think defensive stocks will do a little better.

Caroline Woods:I stocks buy now or hold off.

Justin Bergner:Hold off higher interest rates. This levels aren’t great for them either.

Caroline Woods:Mega cap tech keep riding it or diversify away.

Justin Bergner:I would say keep riding. I think it’s a good place to have meaningful exposure in this market.

Caroline Woods:Best name to play defense with.

Justin Bergner:Oof!

Justin Bergner:That’s a tough one. I guess I would just say, you know, something generic in health care brands like Merck. Yeah, Merck’s run a lot. So I wouldn’t say it’s the best generic, necessarily the best generic name in health care, but feels like just, you know, owning the health care sector as a whole wouldn’t be a bad place to be.

Caroline Woods:Stock the market loves that you’d avoid.

Justin Bergner:Stock. The market loves that I would avoid.

Justin Bergner:That’s a that’s a tough one. Because I’m not sure what the market loves today. I would just probably say a memory area, because even if the AI cycle goes on longer, I think there will be new Chinese capacity and there’ll be limits on how quickly we can build.

Caroline Woods:Market pullback, buy it or wait for more downside.

Justin Bergner:Wait for more downside.

Caroline Woods:S&P 7000 possible or off the table?

Justin Bergner:Definitely possible in a pre-election pullback.

Caroline Woods:But if you had to make a call market by your end higher or lower from here.

Justin Bergner:Touch higher.

Caroline Woods:Finish this sentence. If I had $10,000 to invest, I’d put it in.

Justin Bergner:$10,000 to invest probably. I mean, today where everything stands today, I probably say money market is is fine, particularly if, rates go up a little more.

Caroline Woods:And finally, the best sector to own if the fed hikes rates is.

Justin Bergner:

Justin Bergner:That’s a tough one. But I would say, if the fed hikes rates, let’s just say twice, I would say industrial stocks, given the recent pullback, given a practical place, I there are a number of industrial names I own. I like Paccar just because I think the trucking cycle is finally, recovering. So that would be a name on the industrial side.

Justin Bergner:But there, there are a number of names that one could own.

Caroline Woods:All right. We’ll leave it there. Justin Bergner, a portfolio manager at Gabelli Funds, thank you so much for playing and for your insights and picks. We really appreciate it.

Justin Bergner:Thanks so much, Caroline. Pleasure to be on.

Caroline Woods:If you enjoyed this street talk, check out our full interview with Ross Gerber. He says he’s getting defensive as well, and reveals the tech stocks that he’d still scoop up at these levels.

Investors want SpaceX (SPCX) to show that it can grow fast enough to justify its price, and a new deal gives the clearest proof so far.

At the Goldman Sachs Communacopia and Technology Conference, Chief Financial Officer Bret Johnsen said SpaceX closed an artificial intelligence hosting deal worth about $1.11 billion a month. Billing starts Dec. 1, 2026, and the agreement adds roughly $13.3 billion in yearly revenue.

For investors, this win points to a faster, higher-margin path for SpaceX to make money and support its near-$2 trillion valuation.

What SpaceX signed, and how the company makes money

SpaceX builds and launches rockets. It also runs the Starlink satellite internet service that brings in most of its sales, and now rents out AI computing power from large data centers. 

Johnsen said the deal gave SpaceX’s management more conviction about reaching a $100 billion annual recurring revenue target by the end of 2026, Benzinga reported. Annual recurring revenue is the yearly income a company expects from contracts already in place.

SpaceX did not name the customer. This is the company’s fourth major AI hosting deal in recent months. It comes alongside an agreement with Anthropic worth about $1.25 billion a month and one with Google (GOOG) worth roughly $920 million a month, Investing.com reported. 

Together, these deals turn scarce data-center capacity into steady monthly revenue. 

How the new AI deal changes SpaceX’s revenue outlook

In the second quarter, SpaceX was making sales at an annual pace of about $31 billion. Johnsen now says the company can reach $100 billion in annual recurring revenue by year-end, and this contract is a big step toward fulfilling that goal.

SpaceX rents its data-center capacity for about $30 to $50 for each watt of power, and its management says some of these projects pay for themselves in under a year, Yahoo Finance reported. 

Elon Musk has said that with 10 gigawatts of AI computing power, that rate could bring in $300 billion to $500 billion a year. SpaceX plans to grow its ground-based capacity from an expected 2 gigawatts by the end of 2026 to between 5 and 10 gigawatts in 2027.

SpaceX is preparing Starship Flight 14, set to be the rocket’s first revenue-generating mission.Walter Cicchetti / Getty Images

Why Starship’s next flight starts bringing in money

The second reason for hope is Starship, the giant rocket SpaceX has invested more than $15 billion to develop. That investment has brought in little income so far, and that is changing. 

Starship Flight 14, planned for later this month, is set to be the rocket’s first revenue-generating mission, carrying production Version 3 Starlink satellites into orbit.

More SpaceX Stocks:

JPMorgan doubles down on SpaceX verdict on key update

SpaceX investors get bold Wall Street price target for 2027 year-end

Scott Galloway issues grim forecast for SpaceX stock

“I love the demonstration flights, and now I am excited that we are moving into production cadence,” Johnsen said, according to AviationWeek.

SpaceX wants to launch its first Starmind satellites, which act as small data centers in space, in 2027. Running AI work in orbit gives access to plentiful solar power and easier cooling. Reusable Starship flights would also make it a solid competitor for ground-based data centers.

The risks SpaceX investors still have to consider

Even after the announcement, SPCX stock traded near $151, up only about 2% on the day, which is a small move for a deal this size. 

Many of these hosting agreements run for roughly six months with early-exit options, so the revenue is not locked in, and SpaceX still has to expand its capacity quickly to hit its targets.

Analysts also disagree on valuation. Morningstar calls the stock significantly overvalued and holds a fair value estimate of $62, far below today’s price. Scott Galloway, a New York University marketing professor and widely followed commentator, has argued that SPCX could be worth as little as $10 to $30.

Bulls see it differently. Pivotal Research set a year-end 2027 target of $220, and JPMorgan holds a $240 target, both well above today’s price. The sensible next step is to watch whether Flight 14 succeeds, and whether these hosting deals get renewed.

Related: Morgan Stanley doubles down on SpaceX stock for investors

While not a primary destination for Mexico-bound American tourists as an inland city in the west-central part of the country, Guadalajara is often referred to as Mexico’s “cultural heartland.” That’s because so many of the nation’s most-recognized cultural symbols emerged there: mariachi music, “charrería” Mexican rodeo, and tequila (the blue agave fields from which the spirit is made begin just outside the city limits while the namesake town of Tequila is a 45-minute highway drive away).

As tourism numbers to Guadalajara continue to increase (Guadalajara International Airport saw, at over one million passengers, the highest June on record this year), airlines are rushing to launch new routes before competitors do the same.

Volaris, a publicly-traded budget airline based in Mexico City, just announced plans to start three routes to Guadalajara (GDL) from the U.S. this fall: the flights to Raleigh-Durham International (RDU), Boston Logan (BOS) and Nashville International (BNA) will debut on Oct. 16.

This news comes after Volaris already announced new routes to Washington Dulles (IAD) and Atlanta Hartsfield-Jackson (ATL) earlier this year. The launch date of these two routes was pushed up to the same Oct. 16 start date after initially being slated for the end of the summer.

Volaris to start flights to Guadalajara from Raleigh-Durham, Boston and Nashville

Volaris already flies more than 30 routes to different cities in the U.S., including routes to Guadalajara from smaller California cities like Fresno and Sacramento.

“Volaris’ arrival in Nashville marks an important milestone in the expansion of our international service for the Middle Tennessee region,” Doug Kreulen, the president and chief executive of the Metropolitan Nashville Airport Authority, said in a statement. “This new nonstop route to Guadalajara gives our travelers direct access to one of Mexico’s most important cultural and economic hubs, along with convenient connections to key destinations across the country and beyond through Volaris’ largest hub.”

The heads of the airport authorities in Raleigh-Durham and Boston put out similar statements praising the routes as meeting demand amid both leisure and business travelers (Guadalajara is also home to thousands of tech companies and so often called the “Silicon Valley of Mexico”).

Volaris is a budget airline based in Mexico with a significant network of flights to different U.S. cities.Image source: Shutterstock

“We are extending our wings to new U.S. cities”: Volaris

The routes were launched ahead of the sun-seeking season during which more travelers from colder U.S. cities look to book trips to Mexico and other warmer destinations. Some, like the Atlanta route, will run daily while others will fly three times a week on different days.

Tickets on all five new routes are already available to purchase. Volaris has a fleet of predominantly Airbus A320-200, Airbus A320neo and A321 aircraft.

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“Guadalajara is one of the pillars of our connectivity strategy,” Holger Blankenstein, Volaris’ executive vice president of commercial and operations, said in the airline’s own statement. “From here, we are extending our wings to new U.S. cities so our customers can travel more, discover new destinations, visit their loved ones, and take advantage of new opportunities, always with accessible fares, direct flights, and the quality of service that defines Volaris.”

Related: Mexico just crushed the US when it comes to luxury hotels

FINRA is expected to release August margin debt data around Sept. 15 to 21. Investors will be watching that number closely.

In June, margin debt hit a record $1.502 trillion. In July, it pulled back to $1.417 trillion. If August shows a second straight decline, the pattern will match every major market crash of the past 30 years.

Margin debt surged 77% from $850.6 billion in April 2025 to that June record, according to FINRA.

In the 30-year history of this data, a jump of that size in such a short window has happened three other times. Each one was followed by a significant stock market decline.

The August data arriving this week is the next test of whether this cycle follows the same path.

What is margin debt, and why does it matter?

Margin debt is borrowed money investors use to buy stocks through their brokers. It works well in a rising market. In a falling one, it can force investors to sell everything.

Brokers can demand immediate repayment through a margin call. Investors who get margin calls must add cash or sell stocks to cover what they owe. They cannot wait for prices to recover.

Outstanding margin debt grows over time as the overall market grows. Slow, steady increases do not alarm anyone.

A 77% jump in 14 months is a different situation. That kind of move shows investors borrowing aggressively to chase a rising market, far beyond what normal market growth would explain.

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Margin debt went from $850.6 billion in April 2025 to $1.502 trillion in June 2026. That is 77% in 14 months. In the 30-year history of this data, that kind of move has happened three other times. All three were immediately followed by significant stock market declines.

April 2025 is worth noting as a starting point. Stocks sold off sharply that month during the tariff uncertainty. Investors pulled back on borrowing. Then markets recovered. The AI rally picked back up. Investors started borrowing again, and kept borrowing all the way through June 2026 without stopping.

Retail investors borrowing through brokerage accounts are one piece of the leverage picture. Hedge fund gross borrowing hit $7.2 trillion in July 2026, with gross leverage approaching a 10x multiple, Seeking Alpha reported.

Leveraged ETFs, which use borrowed money to amplify market returns, have more than doubled in assets over the past year. The FINRA margin debt record is the easiest number to track. The full extent of leverage in the system is larger.

What happened the last 3 times margin debt surged?

Between March 1999 and March 2000, outstanding margin debt soared 80%. The dot-com bubble then burst. The S&P 500 lost nearly half its value. The Nasdaq Composite fell by more than three-quarters.

Between June 2006 and July 2007, margin debt grew by 66%. The financial crisis followed. The S&P 500 lost more than half its value before bottoming in March 2009.

Between March 2020 and October 2021, margin debt jumped 95%. The 2022 bear market followed. The Dow Jones Industrial Average fell roughly a fifth. The S&P 500 lost about a quarter of its value. The Nasdaq dropped by about a third.

Three separate cycles, three different catalysts, three different interest-rate environments. Each time, a parabolic run in margin debt reversed and markets fell sharply. Leveraged investors do not get out quietly. When margin calls hit across the market at the same time, selling feeds more selling.

The margin debt figure is not the only number worth looking at. Investor credit balances, which track the cash available to cover margin obligations, fell to a record low of -$1.06 trillion in June, according to Advisor Perspectives.

Investors are carrying record margin obligations while sitting on record-low cash reserves to back them up.

Nobody can say a decline is guaranteed. What can be said is that a heavily leveraged market has less cushion.Michael M. Santiago / Getty Images

Why the pullback in margin debt is worth watching

Margin debt briefly dipped for two months in February and March 2026 before resuming its climb to the June record. July confirmed one month of pullback.

The August reading, due from FINRA this week, is the critical data point. A second straight monthly decline would extend the pattern that preceded all three prior crashes. A rebound would suggest investors are still borrowing to buy, and that the June peak was not the turning point.

In all three prior episodes, a peak in margin debt was followed by a market decline. Fast on the way up. Fast on the way down.

Nobody can say a decline is guaranteed. What can be said is that a heavily leveraged market has less cushion.

A sharp rise in Treasury yields, a geopolitical shock or a bad earnings season can trigger waves of margin calls across multiple sectors at once. Forced selling from margin calls is what takes a normal pullback and accelerates it into something much worse.

FINRA has reported outstanding margin debt every month since 1993. The current 14-month run of 77% growth stands out. It does not tell you when a reversal happens. It tells you how stretched the current positioning has become.

The AI rally pushed the Dow, S&P 500, and Nasdaq to multiple record highs over the past two years. Strong markets attract more investors and more borrowing.

Record valuations on top of record margin debt are where all three prior episodes started. This cycle also has oil above $100 a barrel and a 30-year Treasury yield at a 19-year high, sitting alongside the margin debt record.

The previous three cycles did not have all of those factors running together.

What investors should do

Selling everything is not the right response to the margin-debt data. Markets can remain elevated far longer than anyone expects, and nobody can call the exact timing of a reversal.

What investors can do is review their own leverage and concentration before a reversal happens, rather than scrambling during one.

If you are using margin, this is a good time to review how much you are borrowing and what happens to your portfolio if the market drops sharply. A margin call forces you to sell when prices are falling, which locks in losses and removes you from the recovery.

Investors who hold positions without margin can wait through a downturn. Leveraged investors often cannot.

Concentration is the other risk. The current rally has been heavily driven by a small group of AI and technology companies. If those stocks correct sharply, investors who are both leveraged and concentrated in that sector face compounded losses.

Checking whether your portfolio is overweight in one theme is worth doing now, not after prices have moved.

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I rarely see double-upgrades from Wall Street. JPMorgan analyst Richard Choe moved an AI stock directly from Underweight to Overweight on Sep. 14, skipping a neutral rating entirely, in a note shared with TheStreet. 

JPMorgan may have underestimated this one. Now it’s slamming the brakes, making a U-turn and hitting the gas.The double-upgrade is JPMorgan’s second such move in the AI-adjacent space in recent months. The bank made the same jump with Circle Internet Group, a fintech and digital financial services company tied to the growing stablecoin economy in Nov. 2025, Yahoo Finance reported.

Before that, Lanxess, a German specialty chemicals maker, got the double upgrade in March 2026.

Now IREN gets the same dose, with JPMorgan upgrading from Underweight to Overweight and raising its price target to $65 from $46, a 41% increase.

IREN Limited (IREN) trades at $43.17, up 14.30% year-to-date and 27.12% over the past year, according to Yahoo Finance. The three-year return is an aggressive 761.68%.

We can attribute that massive explosion to the impact of the company’s pivot from Bitcoin mining to AI cloud infrastructure on long-term shareholders. Choe’s reasoning comes down to one word, and it is a good one: Nvidia.

Also Read: IREN Limited Latest News and Stories 

What actually drove the IREN double-upgrade

JPMorgan’s upgrade rests on a specific structural development that transformed IREN’s competitive positioning.

IREN secured a five-year partnership with Nvidia worth around $5.5 billion. The deal is worth approximately $3.4 billion over five years, and also granted Nvidia a five-year option to buy up to 30 million ordinary shares at $70 each, representing up to $2.1 billion in conditional investment rights. Both total down to $5.5 billion.

IREN also achieved “Exemplar Cloud” status on the Nvidia GB300 NVL72 system, according to IREN disclosures. 

I take that designation as Nvidia’s validation that IREN’s infrastructure meets the highest standards for deploying its most advanced GPU systems.

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Beyond Nvidia, IREN has been stacking contracts across the AI ecosystem: Microsoft receiving the first Horizon 1 deployment, Cohere, Prometheus, Perplexity, Figure AI, Fal AI, and Higgsfield AI signed, plus a new multi-year contract with an undisclosed leading frontier AI lab, according to IREN’s fiscal year 2026 results. 

Customer prepayments on recent contracts cover 45% to 55% of GPU capital expenditure, meaning customers are partially funding IREN’s buildout.

JPMorgan also flagged the pricing shift. AI compute services are now fetching $15 to $20-plus per watt, up from the prior $10 to $15 range. 

The same fiscal year 2026 report notes that the recent three-year contracts are priced above $20 million in revenue per megawatt, with active discussions at approximately $25 million per megawatt.

This business transition justifies the upgrade

The scale of what IREN has accomplished in fiscal year 2026 is the foundation beneath JPMorgan’s conviction.

AI Cloud Services revenue grew 8x to $128.8 million in FY26 (versus FY25 $16.4m) 

Raised its 2026 contracted annualized run-rate revenue (ARR) guidance to $4 billion

2026 ARR capacity is largely sold out 

Late-stage customer discussions are underway for a significant portion of 2027 capacity, with 2028 financing and customer discussions progressing in parallel.Source: IREN’s FY26 Results

The capital structure behind the expansion is notable for its scale and efficiency. IREN secured $3.6 billion in investment-grade GPU financing for the Microsoft contract at 6.0%, funding 96% of the associated GPU capital expenditure together with customer prepayments. 

A separate $2.8 billion in GPU financing from Blue Owl and PIMCO at 9.0% supports non-investment-grade customer deployments. Total committed capital, including cash, GPU financing, and prepayments, reached $14 billion.

Management committed to winding down all Bitcoin mining by December 2026, eliminating the strategic ambiguity that has historically weighed on investor perception of the business.

“We have spent years assembling what is difficult to replicate: power, land, data centers, compute, software and people,” said Co-CEO Daniel Roberts in the earnings commentary. “This is only the beginning.”

IREN officially delivered Horizon 1, the first of four 50-megawatt liquid-cooled GPU deployments at Childress, to Microsoft.Shutterstock

The deployment roadmap and why the physical infrastructure is the real deal

Competitors rent data center capacity. IREN owns the land, electrical grid interconnections, and physical data centers outright across North America, Europe, and the Asia-Pacific region. That all-around ownership structure gives it cost management advantages and capacity control that asset-light competitors cannot replicate.

The deployment targets are aggressive: 0.3 gigawatts of IT capacity in 2026 and 0.8 gigawatts in 2027, with additional liquid-cooled deployments planned at Mackenzie, Canal Flats, and Prince George in 2027, IREN reported. 

Global expansion is progressing at Sweetwater in Texas, Kiowa in Oklahoma, Bundey in Australia, and Badajoz in Spain.

Horizon 1, the first of four 50-megawatt liquid-cooled GPU deployments at Childress, has been delivered to Microsoft. Horizon 2 is already in commissioning, while Horizons 3 and 4 are in late-stage construction and targeted for delivery in Q4 2026. That’s a serious buildout.

The net cash position, existing GPU financing commitments, and contracted customer prepayments give IREN approximately $14 billion in available capital to fund the buildout. That removes the near-term dilution risk that has historically constrained smaller AI infrastructure companies.

At $43 against a $65 price target from a firm that just skipped neutral entirely, JPMorgan’s conviction is visible. Also, the 2026 capacity ramp and the Q4 Horizon deliveries are likely to show up in the financial results sooner or later.

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