Lancium’s flagship property, the 1,000-acre Lancium Clean Campus in Abilene, is known for being the first operating site of Stargate, the AI infrastructure joint venture formed by SoftBank, OpenAI, and Oracle. President Donald Trump unveiled Stargate in January, with the partners promising to invest up to $500 billion in AI infrastructure over time. Lancium intends to leverage NVIDIA’s capital investment to expand operations while it considers a potential IPO as early as 2027.

Electricity as the Bottleneck

The investment fits with a pattern that NVIDIA Corporation (NASDAQ:NVDA) has been pursuing more aggressively this year. Instead of simply selling processors into the AI buildout, the company is increasingly taking stock interests in the infrastructure layer that makes its chips viable at scale. NVIDIA’s GPUs are only as good as the data centers that can power and cool them, and reports throughout 2026 have identified electricity, not chip supply, as the limiting factor on how quickly hyperscalers and AI labs can place new capacity online.

Jensen Huang’s Equation

NVIDIA Corporation (NASDAQ:NVDA) CEO Jensen Huang made the basic logic clear in remarks at a private gathering of family offices and financial firms in Taipei, arguing that returns on AI infrastructure investment have reset significantly over the last six months and are now profitable at a scale that has calmed earlier skeptics. Huang’s definition of what AI infrastructure required was straightforward: land, power, and funding, in that order.

Meanwhile, NVIDIA’s backing serves a dual purpose for Lancium: it provides growth capital ahead of a potential 2027 IPO, and it places one of the most prominent companies in AI directly on its cap table, a credibility sign that could be as important as the cash itself when Lancium eventually goes public.

Institutional Backing

Institutional sentiment toward NVIDIA Corporation (NASDAQ:NVDA) is overwhelmingly positive, with smart-money managers increasing long-term exposure ahead of the infrastructure announcement. According to 13F filing data, hedge fund ownership increased from 264 funds in Q4 2025 to 275 funds in Q1 2026. Fisher Asset Management is Nvidia’s largest institutional stakeholder as per Insider Monkey database, with a staggering $15.4 billion position.

The Verdict

Core growth investors should see NVIDIA’s backward integration with power developers as a significant strategic moat expansion. By securing grid hookups for gigawatt-scale data centers, NVIDIA Corporation (NASDAQ:NVDA) ensures long-term demand visibility for its Blackwell and next-generation GPU architectures.

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While we acknowledge the potential of NVDA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years 

Disclosure: None. Follow Insider Monkey on Google News.

Bull Case: Ram Trucks Carry The Load

Stellantis reported a Q2 net profit of 293 million euros, a sharp reversal from a loss of 1.87 billion euros a year earlier, while adjusted operating income more than tripled to 773 million euros. North America, the region investors watch most closely, saw market share climb to 7.4% from a flat 7%, and Ram notched its fourth straight quarter of year-over-year sales growth, up 6%, breaking a seven-year losing streak. Renewed demand for the reintroduced Hemi V8 helped drive that gain, and Stellantis is leaning further into high-margin performance vehicles to extend it.

The Ram 1500 TRX SRT, priced at $102,590 with shipping, just reached dealerships only six months after its unveiling, and a lower-priced Rumble Bee variant is coming in the lower $60,000s. SRT trims carry margins two to three times higher than standard versions, and the automaker plans eleven SRT models across Ram, Jeep, and Dodge over the next five years. Combined with two all-new and three refreshed vehicles launched in the quarter, and nine more on the way, that product cycle backs up a stated goal of pushing North American margins to 8% to 10% within five years.

Bear Case: Tariffs Threaten A Fragile Recovery

Wall Street was not impressed by the Q2 print. Adjusted operating income fell short of the 914 million euro estimate, and the stock dropped nearly 10% on the news before recovering part of that loss, a sign the turnaround still has to prove itself. That skepticism looks more justified given what surfaced on August 14, when Unifor said Stellantis notified the union it may close and sell its Brampton plant, ending decades of vehicle assembly there. Stellantis pointed to US tariffs on Canadian goods as the driver, and Brampton would not be the first casualty.

The plant was already idled for retooling in 2024, paused again in 2025, and lost its planned Jeep Compass production to a factory in Illinois once the tariffs hit. Brampton employed 2,200 workers before closing, and Canada’s government, including Industry Minister Melanie Joly’s office, has been pushing Stellantis to restart it. Stellantis has also previously discussed building electric vehicles in Canada with Chinese partner Zhejiang Leapmotor, an idea Unifor has openly opposed. All of this lands just as Unifor enters new contract talks covering Brampton and two other plants, with the current agreement expiring in September.

What The Numbers Say

Hedge fund ownership of Stellantis slipped from 34 funds to 32 quarter over quarter, a modest pullback rather than a rush for the exits. Short interest sits at just 3.63% of float, suggesting little organized betting against the stock despite the Brampton headlines. As of August 14, shares trade at a forward P/E of 13.68, a multiple that is not pricing in a fast recovery but is not pricing in disaster either.

A Turnaround Still In Progress

Stellantis enters the back half of 2026 with real evidence its turnaround is working, from rising North American share to a reinvigorated, higher-margin Ram lineup. But the Brampton situation shows how much of that progress still depends on tariff policy and labor talks outside the company’s control. For the recovery to hold, Ram’s momentum and the SRT push need to keep outrunning whatever the Canadian disruption costs.

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While we acknowledge the potential of STLA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In.

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Bull Case: A Cheaper, Faster Gemini

Gemini 3.7 Flash arrived just three weeks after Gemini 3.6 Flash, a pace that signals Google is iterating quickly on the models it hopes will power autonomous AI agents. The new model targets businesses building systems that can plan tasks, use software tools, and complete multi-step workflows with less human oversight, and Google says it shows improved performance on coding tasks including debugging, issue resolution, and production-ready code generation. To win over developers, Google priced Gemini 3.7 Flash at 75 cents per million input tokens and $3.75 per million output tokens through the end of the year, half the original cost of Gemini 3.6 Flash. It is also rolling out immediately to Gemini Spark, Google’s subscription AI agent service available in more than 160 countries.

That pricing sits alongside a cloud business converting AI investment into revenue. Google Cloud’s backlog has climbed to $514 billion, and Alphabet expects to recognize a little more than half of it as revenue over the next 24 months. Alphabet also holds more than $240 billion in cash and marketable securities, giving it room to keep funding its buildout as free cash flow comes under pressure.

Bear Case: The Bill Comes Due

Alphabet’s capital expenditures are now guided to $195 billion to $205 billion for 2026, up from $91 billion in 2025 and $53 billion in 2024. Second-quarter capex alone was $45 billion, double the year-earlier figure, pushing Alphabet to a quarterly free cash flow loss of $5.9 billion. Buybacks have gone to zero, and Alphabet raised roughly $56 billion in debt plus about $50 billion from stock sales in the first half to help cover the gap.

That borrowing culminated in a $25 billion, ten-tranche bond sale that closed Monday, ranging from notes due in 2028 to a $2.5 billion tranche not due until 2066. Much of that money funds servers and networking gear that Alphabet itself depreciates over about six years, meaning a large share of this year’s spending will need to be repaid all over again long before the longest bonds come due.

What The Numbers Say

Hedge fund ownership of Alphabet fell from 288 funds to 265 in the most recent quarter, a mild pullback rather than a rush for the exits. Short interest sits at just 1.20% of float, suggesting little organized skepticism toward the stock. Alphabet trades at a forward P/E of 16.86, as of August 14, a multiple that looks inexpensive for a company at the center of the AI buildout. But that valuation was calculated before free cash flow turned negative, and on a price-to-free-cash-flow basis the multiple has been pegged closer to 79. That gap between the two numbers is the tension investors are weighing right now.

The Question Ahead

Alphabet is running two stories at once: a fast-moving AI product cycle built to keep pace with rivals, and a balance sheet absorbing the cost of that pace in real time. Gemini 3.7 Flash shows Google can still ship quickly and cheaply, even as the market waits on the flagship model that would prove it can compete at the very top. Whether the cloud backlog keeps converting into cash fast enough will decide how comfortably Alphabet can carry its new debt.

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While we acknowledge the potential of GOOGL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Bull Case: The Economics Are Shifting

Uber’s driver network is also its biggest expense. In the second quarter, the platform processed $58 billion in gross bookings, and $25 billion of that went straight to its 10.2 million drivers, the single largest cost on the books. Every autonomous mile that removes a driver from that equation pushes more of each ride toward Uber’s own margins, without Uber needing to build or own a self-driving car itself.

That is the logic behind the model CEO Dara Khosrowshahi has been building: let partners like Pony.ai handle the hardware and software, while Uber supplies the 208 million monthly active customers already on its app. Autonomous vehicles run in seven cities today, and Khosrowshahi has signaled that could double to 15 by the end of 2026, backed by roughly $10 billion Uber plans to commit to its partners over the next few years.

The core business is moving too. Uber added more first-time users over the past year than in any twelve months of the last five; monthly active platform consumers grew 16% year-over-year, and trips rose 18%. Delivery, now more than a third of total sales, grew revenue 28% year-over-year while transportation grew just 1%. Non-GAAP net income climbed 29% to $1.6 billion, an 11.6% margin, and the stock’s roughly 8% year-to-date slide has left its price-to-sales ratio at 2.8, well under its 4.1 average since going public in 2019.

Bear Case: Big Promises, No Timeline

Friday’s announcement left notable gaps. Pony.ai gave no timeline for when the 2,000-plus robotaxis would actually hit European roads, and the four cities beyond Zagreb went unnamed, as did any specifics on the Middle East plans. For a company betting its next act on autonomy, vague rollout details are a reason for caution as much as excitement.

Uber’s approach also means leaning on outside technology rather than owning it. The roughly $10 billion earmarked for partners assumes those partnerships keep delivering rides at scale and on schedule. The competitive field is already crowded, too: Alphabet’s Waymo alone completes more than 500,000 paid autonomous trips across 11 US cities every week, a scale Uber’s partner network has yet to match anywhere.

What The Smart Money Sees

Hedge fund ownership of Uber slipped from 153 funds to 147 last quarter, while ownership of Pony.ai climbed from 23 to 31, pointing to institutional money rotating toward the smaller AV specialist even as it trims Uber. Short interest tells a calmer story: just 2.41% of Uber’s float is sold short, against 6.57% for Pony.ai, suggesting far more skepticism is aimed at the newer, unprofitable player. Additionally, Uber trades at 22.68 times forward earnings, a multiple that already assumes its delivery and autonomous bets keep paying off.

The Road Ahead

Uber’s expanding robotaxi footprint offers a cheaper path to growth than adding more human-driven rides ever could, and the underlying business, from delivery growth to rising margins, is already moving in that direction. Still, the Pony.ai deal remains a plan more than a proof point, with no rollout date and unnamed cities standing between Friday’s announcement and any real revenue.

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While we acknowledge the potential of UBER and PONY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In.

Disclosure: None. Follow Insider Monkey on Google News.

Guidance Downgrade

The headline number is the forecast drop itself: Under Armour, Inc. (NYSE:UAA) now expects full-year revenue to fall by a mid-single-digit percentage, a significant decrease from its previous target of only a “slight decline.” The breakdown is centered right where it hurts the most. Under Armour’s North America sector, its largest market by far, saw revenue fall 9% to $609.8 million in the fiscal quarter ended June 30. During the post-earnings call, CFO Reza Taleghani didn’t sugarcoat the forecast, telling investors that the company is expecting a more difficult consumer environment, notably in North America and parts of Asia Pacific, to continue through the second quarter.

The pressures behind the miss are largely macro, but they aggravate a company-specific issue. Ongoing inflation and a more difficult consumer-spending environment have caused buyers to be more careful about discretionary purchases such as apparel, footwear, and accessories, a trend that has impacted the whole sportswear industry, not just Under Armour, Inc. (NYSE:UAA). Morningstar analyst David Swartz put it bluntly: the sportswear market is struggling right now, and tariff-related cost constraints aren’t helping. On top of the macro pressure is a competitive one. Buyers are increasingly moving toward newer, innovation-focused companies such as On and Hoka.

Macro Headwinds and Premium Reset

CEO Kevin Plank, who returned to the position in 2024 to create a turnaround, has pursued a strategy based on doing less, better. The company has reduced its product assortment by about 25%, focusing on higher-priced items in sectors such as training, running, and team sports rather than competing across price points. Plank’s own definition of the plan was pointed: consumers do not need more choices, but rather better ones. Under that idea, Under Armour, Inc. (NYSE:UAA) has introduced new goods geared in part at attracting younger Gen Z customers, including training shoes such as the “Surge 5” and “Radiant TR”.

That strategic reset did not come cheap. Under Armour, Inc. (NYSE:UAA) stated it had spent $266 million on restructuring and transformation efforts thus far, with the overall turnaround plan scheduled to be completed by the end of the year.

The Case for Under Armour

The argument for Under Armour, Inc. (NYSE:UAA) is based on the notion that the pain experienced today is the result of a conscious, disciplined reset rather than a symptom of deeper deterioration. Cutting the product range by around 25% and focusing on higher-priced clothing is a bet that fewer, better items can rebuild both margin and brand equity rather than pursuing volume. With $266 million already spent on restructuring and the plan slated to be completed by the end of the year, the company’s highest expenses may be behind it, paving the way for a cleaner cost base in the coming fiscal year. If that discipline remains, SKU reduction and better cost management might lead to considerable margin expansion and full-price sell-through as demand stabilizes.

Wall Street Skepticism

While management believes that product consolidation and inventory management would eventually restore gross margins and brand reputation, institutional investors remain skeptical. According to filings, hedge fund ownership decreased from 46 in the fourth quarter of the preceding year to 40 in the first quarter of this year. Moreover, short interest is at an excessive 23.98% of total float. This strong short position implies significant institutional skepticism. This skepticism may be related to the timing of North American demand recovery and the company’s capacity to maintain pricing power without resorting to margin-diluting promotions.

Insider Monkey’s Bottom Line

Under Armour’s lowered guidance highlights the need for a structural brand re-invention that takes time, and is hindered by near-term macro headwinds. For investors, the key signals over the next several quarters will be stabilization in North American sales, continued gross-margin improvement, and evidence that reduced discounting can strengthen full-price sell-through.

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While we acknowledge the potential of UAA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years 

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A Blowout Quarter

On August 13, the company released second-quarter 2026 earnings that exceeded Wall Street estimates across the board. Revenue increased by 126% year-over-year to $704 million, far exceeding analyst expectations of $685 million. Adjusted earnings per share of $0.46 outperformed the $0.27 consensus forecast by $0.19, a margin of more than 70%. Operating income increased 139% to $240 million, with an operating margin of 34%, while adjusted operating income increased 150% to $381 million, bringing the adjusted operating margin up five percentage points to 54%.

Guidance Overshadows the Beat

Despite this strength, shares plummeted as much as 6.9% in pre-market trade. The disconnect stems from guidance rather than the quarter itself. Bending Spoons S.p.A. (NASDAQ:BSP) expects full-year 2026 revenue of $2.78 billion to $2.82 billion, a figure that is significantly lower than the $2.895 billion Wall Street average. In contrast, third-quarter guidance came in slightly ahead of expectations, making the full-year slump appear less like near-term weakness and more like a longer-run growth rate that the market was unprepared for.

There’s also the matter of how much growth is real versus bought. Organic revenue growth was only 3% for the quarter, a stark contrast to the 126% headline figure. The majority of the growth comes from newly acquired businesses such as AOL, Eventbrite, Harvest, MileIQ, Tractive, and Vimeo.

The Acquisition Machine

That acquisition-heavy approach encompasses the entire Bending Spoons S.p.A. (NASDAQ:BSP) philosophy. Since the beginning of 2023, the company has invested around €6 billion in 15 acquisitions, more than tripling revenue, operating income, and adjusted operating income by 2025. For the time being, the balance sheet supporting that plan appears to be solid: $793 million in cash and $1.28 billion in borrowing capacity. Operating cash flow for the first half of 2026 was €254 million, though interest expense increased 205% year-over-year to €109 million, highlighting the rising cost of debt-funded acquisitions.

The Bull Case

Every headline number beat expectations and Q3 guidance crossed expectations, implying near-term momentum remains intact. The acquisition strategy also has a proven track record: €6 billion spent since 2023 has more than tripled key financials, with the balance sheet still holding opportunity for better execution.

The Bear Case

That said, almost all reported growth came from acquisitions instead of the core business, and organic growth of only 3% raises concerns about sustainability as easy comparisons begin to fade. A lower full-year forecast means that management expects a slowdown, and an increase in interest expense of 205% indicates that the acquisition engine is becoming more expensive to feed just as dealmaking heats up.

Insider Monkey’s Verdict

For the time being, it appears that Bending Spoons S.p.A. (NASDAQ:BSP) is caught between a solid quarter and a market that is revising its growth expectations. Investors comfortable with the acquisition-led model may still see a compelling long-term case, but the key metrics to watch are organic revenue growth, net leverage, and the company’s ability to integrate recent purchases without allowing financing costs to erode cash generation. A steady or improving organic growth rate over the next few quarters would lend credibility to the bull case that this is only a temporary guidance revision, not a structural slowdown.

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While we acknowledge the potential of BSP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years 

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The Deal Talk

According to Reuters, Silver Lake and Workday, Inc. (NASDAQ:WDAY) have carried out negotiations regarding a potential takeover in recent months, but the talks are still ongoing, with no guaranty that a transaction would occur. According to one source, Silver Lake may seek other investors to assist in financing the deal, which would be one of the firm’s largest technology investments to date. Workday’s market value was around $43 billion before the report, and a full buyout at anything close to a typical takeover premium would place the deal in rare territory for software leveraged buyouts, while also representing the latest sign of private equity interest for large tech targets reviving after a number of quiet years.

Why Workday is a Target

The stock has been under pressure for much of 2026, trading more than 40% lower than its 2024 top, as investors have grown concerned that AI technologies could destroy the value of traditional enterprise software. Leadership has already responded to that pressure: Aneel Bhusri, who co-founded Workday, Inc. (NASDAQ:WDAY) in 2005, returned to the CEO post in February for the mission of guiding the company during what it refers to as the rapidly evolving AI age. A private equity firm willing to pay a premium for a company that the market has been discounting due to AI disruption fears indicates that at least one sophisticated buyer sees more value in Workday’s roughly 11,500 customers, which include Netflix, U.S. Bank, and Johns Hopkins University, than its depressed valuation suggests.

The Bull Case

The bullish argument is that Silver Lake’s reported interest may highlight value in Workday that has been obscured by the market’s AI concerns. Going private would allow Bhusri to invest in an AI transition away from quarterly public scrutiny, a logic that has prompted a number of other software acquisitions in recent years.

The Bear Case

That said, talks are still ongoing with no guarantee of a deal, and the stock’s strong intraday movement before repeated volatility halts shows how much of the move is speculative positioning rather than assurance. Short interest of 12.74% indicates that a significant number of investors are still betting against the stock even before the report of the takeover emerged. Such skepticism reflects uncertainty that a deal would close at these levels or that AI-disruption worries will be properly addressed even under new ownership.

Hedge Fund Sentiment

Hedge fund ownership for Workday, Inc. (NASDAQ:WDAY) has decreased, from 70 funds in the fourth quarter of last year to 63 in the first quarter of this year.

Insider Monkey’s Verdict

Until a deal is confirmed, investors should consider this a speculation rather than a completed transaction. Those who already own shares might want to wait for regulatory filings or an official company statement before assuming a premium has been locked in, as reported talks can fail abruptly. New investors chasing the pop should avoid buying at the highs of a volatile company and instead wait for confirmation of transaction terms or a formal offer price before treating the buyout as anything other than a rumor.

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While we acknowledge the potential of WDAY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years 

Disclosure: None. Follow Insider Monkey on Google News.

Okay, but I’ve got strict rules in this. One is that we do not care where a stock has come from; we care where it’s going to. And second, has the price-to-earnings multiple come down, or the earnings come down? Right now, the earnings are okay. The price-to-earnings multiple is at 20. So call me a beginning position in Netflix, and for you, maybe you want to buy a little more to average down.

M&A Noise and Broad Tech Rotation 

Cramer’s willingness to recommend averaging down shows a consistent thesis he has defended throughout summer market volatility. On June 9, when asked about headwinds pressuring the stock after a 13% pullback, Cramer pointed to market anxiety over Netflix’s earlier pursuit of Warner Bros. Discovery assets rather than operational decay:

Okay, I want to buy Netflix. The biggest headwind is that they went and got involved with trying to buy the Warner Brothers Studio, and everyone thinks, oh, they don’t know what they’re doing. I think they took the optionality that they had. They debated it. They made a decision, then they decided not to do it, because they’re going to do fine. I think we’re going to look back and think, wow, I bought it down 13%, not bad.

On June 30, as broad market sentiment turned cold toward megacap tech names, Cramer reiterated that macro selling pressure and residual deal anxiety created an artificial drag on the business:

People think the business has slowed. I disagree with that analysis, but you know what? The market has turned against the FAANGs. It’s turned against the Mag Sevens. It’s caught up in that negativity, and it can’t seem to shake the fact that it was trying to buy Warner Brothers Discovery. They can’t seem to shake it, and that’s all she wrote.

Recent 2026 Analyst Caution Targets Engagement and Guidance

While Cramer views the compressed valuation as an attractive entry point, mid-2026 research updates from Wall Street desks highlight emerging fundamental headwinds. Following the company’s Q2 2026 earnings print in July, Benchmark maintained a Hold rating, noting that engagement growth was just 2% year-over-year in the first half of the year as subscriber additions in core North American and European markets normalized.  Similarly, KGI Securities downgraded Netflix, Inc. (NASDAQ:NFLX) from Outperform to Neutral in July 2026, mentioning potential top-line deceleration in the absence of major blockbuster releases. Analysts at Guggenheim also trimmed their price target to $75 in July 2026 while maintaining a Buy rating, pointing out that narrowing full-year revenue guidance and scaling content amortization costs could limit immediate margin expansion even as ad-tier monetization develops.

Solid Hedge Fund Ownership and Low Short Interest 

Institutional interest tracked across 1,000+ hedge funds by Insider Monkey shows sustained high-conviction backing for the streaming leader. A total of 144 hedge funds held shares of Netflix, Inc. (NASDAQ:NFLX) in Q1, down slightly from 146 funds in the prior quarter, which shows that smart money managers remain anchored in the position. While Fisher Asset Management was its biggest shareholder, it is worth noting that Harris Associates increased its stake in the company by 30201% in Q1. We also recently discussed what Bill Ackman‘s letter, where he discusses the stock’s rebound possibility despite slowdown trends.

Meanwhile, the short percentage of float for Netflix, Inc. (NASDAQ:NFLX) sits at 2.23%, showing minimal short-side conviction.

Netflix, Inc. (NASDAQ:NFLX) remains a dominant force in digital entertainment. While recent M&A distractions and broader tech sector rotation have introduced near-term volatility, steady institutional ownership, minimal short interest, and a compressed valuation multiple lend strong support to the thesis. For long-term investors evaluating temporary drawdowns, Cramer’s disciplined approach of looking forward rather than backward provides a compelling roadmap.

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While we acknowledge the potential of NFLX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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READ NEXT: Jim Cramer Recommends Goldman Sachs and Morgan Stanley to Profit From Accelerating M&A Deals and Jim Cramer Asks Why Constellation Brands (STZ) Stock Remains Cut in Half Despite Strong Earnings.

Disclosure: None. Follow Insider Monkey on Google News.

A Familiar Suitor

Peltz isn’t a stranger at Wendy’s. Trian is the company’s largest shareholder, with a 7.85% interest, while Peltz personally holds approximately 16.24%. His relationship with Wendy’s spans over two decades, including a stint as chairman, and this isn’t even his first attempt at a takeover: Trian considered taking Wendy’s private in 2022, stating in a filing that it saw the company as undervalued during the time, giving the fund an unusually intimate vantage point on how much trouble the company is in.

A Struggling Business

The takeover report came just days after The Wendy’s Company (NASDAQ:WEN) reported its sixth straight quarter of same-store sales downturns, a slump analysts say has cost the company its long-held spot as America’s second-largest burger chain by system sales, a title now belonging to Restaurant Brands International’s Burger King. Following the latest quarterly sales dip, the company pulled back its full-year 2026 estimate, citing fewer customer visits, inflation, and a declining U.S. restaurant footprint as the root causes of decreased sales and profitability.

New leadership has already attempted to turn things around. Bob Wright, who was named permanent president and CEO in May, has outlined a turnaround strategy focusing on revamping the menu around attractive pricing, better marketing, and improved digital ordering, similar to the going-private turnaround he previously completed at Potbelly.

The Bull Case

The case for Wendy’s is based on Trian’s thorough understanding of the business. Peltz and Trian have a unique perspective on the company’s true value, having previously sat close to the boardroom and discussed a take-private deal in 2022. Their willingness to reconsider a bid now shows they still see upside that the public market isn’t pricing in. CEO Bob Wright offers a proven turnaround strategy, having completed a similar going-private change at Potbelly, and taking The Wendy’s Company (NASDAQ:WEN) private may allow him to implement that plan without the burden of quarterly public reporting.

The Bear Case

Meanwhile, the case against getting overly hopeful begins with the underlying business, which is failing rather than stabilizing. Six straight quarters of declining same-store sales, the loss of its status as America’s second-largest burger chain, and the withdrawal of full-year projections all point to a company still looking for a floor. Nothing has been publicly suggested yet, and Trian’s 2022 approach did not result in a transaction, something worth keeping in mind before presuming this attempt would go differently.

Smart Money Sentiment

Hedge fund ownership has continued to be steady leading into the report, with 36 funds in both the fourth of 2025 and first quarter of 2026. Meanwhile, short interest is at an extremely high 33.93% of the float, showing that a sizable group of investors had already bet against the stock before the takeover story took place.

Insider Monkey’s Verdict

Investors should consider this as an unconfirmed issue stacked on top of a faltering business. Those who already own shares may want to wait for a formal proposal or regulatory filing before assuming a takeover premium is locked in, especially since Trian abandoned a similar strategy in 2022. New investors should keep an eye on incoming same-store sales data and any updates on the turnaround plan’s development, because if the deal falls through, The Wendy’s Company (NASDAQ:WEN) shares would most likely trade on fundamentals that have been worsening for a year and half.

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While we acknowledge the potential of WEN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years 

Disclosure: None. Follow Insider Monkey on Google News.

The Headline Numbers

The company’s operating earnings increased 16% year-over-year to $12.98 billion, up from $11.16 billion, as improvement in energy, railroads, and manufacturing countered a weaker insurance sector. Net earnings attributable to shareholders more than doubled to $25.67 billion, up from $12.37 billion the previous year, bolstered by $12.68 billion in investment gains, including $10.9 billion in unrealized gains on Berkshire’s equity positions.

The Real Story: Capital Deployment

The earnings beat comes roughly second to what Berkshire Hathaway (NYSE:BRK-B) did with its money. Abel authorized over $4.5 billion in share buybacks during the quarter, a substantial increase from $235 million in the first quarter, and continued to buy into July, repurchasing over $3.3 billion of stock in that month alone.

More notably, Berkshire Hathaway (NYSE:BRK-B) became a net buyer of shares for the first time in 15 quarters, buying around $23.5 billion of stock while selling $3.7 billion, totaling around $20 billion in net purchases. A large portion of that went to Alphabet, while more than $21 billion was divided across other commercial and industrial names. The quarter also saw Berkshire’s $6.8 billion all-cash purchase of homebuilder Taylor Morrison.

None of this depleted the balance sheet meaningfully. Berkshire’s cash and Treasury position fell to $365.5 billion at the end of the quarter, down from a record $397.4 billion three months earlier, still a massive cushion, albeit a somewhat smaller one.

Institutional Sentiment

Smart-money positioning heading into the quarter revealed a minor institutional rebalancing during the leadership transition. Insider Monkey’s database shows that hedge funds holding Berkshire Hathaway (NYSE:BRK-B) shares fell from 133 in Q4 to 126 in Q1. That said, with operating earnings crossing forecasts and Abel exhibiting clear capital allocation discipline, institutional trust is stable around the post-Buffett operating model, further supported by a negligible short position of 0.92%.

The Bottom Line

Greg Abel’s decisive capital allocation could be an inflection moment for Berkshire Hathaway (NYSE:BRK-B). By shifting from passive capital hoarding to strategic stock purchases, increased share buybacks, and real estate M&A, Abel has signaled that Berkshire would actively seek value rather than sitting on the sidelines. With $365.5 billion in cash on hand, Berkshire Hathaway (NYSE:BRK-B) retains unequaled balance-sheet capacity to capitalize on market volatility while multiplying cash flow across its key operating segments.

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While we acknowledge the potential of BRK-B as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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In an updated report during the week, the listed firm said that it grew its revenues by 48 percent in the second quarter of the year to $64.08 million from $43.2 million in the same period last year, on the back of strong revenue volume growth from its US Fractional Flow Reserve business, coupled with an increase in total US Plaque revenue case volume.

However, it widened its net loss by 70.6 percent to $15.7 million from $9.2 million, amid higher losses before provision for income taxes.

In the first half of the year, revenues increased by 45 percent to $116.67 million from $80.63 million, while net loss inched up by 3.6 percent to $43.1 million from $41.5 million year-on-year.

The New York Stock Exchange building. Photo by Дмитрий Трепольский on Pexels

Higher 2026 Growth Outlook

Heartflow Inc. (NASDAQ:HTFL) posted a highly optimistic outlook for the full-year period, with revenue growth now expected to grow by 40 to 42 percent to a range of $246 million to $250 million. It previously expected revenues to jump by 29 to 32 percent to a range of $228 million to $232 million.

“The second quarter reflects the growing strength of Heartflow’s category leadership and unique AI technology platform for identifying, diagnosing, managing, and treating coronary artery disease,” President and CEO John Farquhar said.

“The CCTA market for detecting CAD continues to grow rapidly and remains significantly under-penetrated, providing a strong backdrop for continued growth. Our FFR business remains strong and durable, while Plaque is rapidly emerging as a meaningful second growth engine—helping us win new accounts, deepen physician utilization and expand the value of the Heartflow platform for our customers. At the same time, record gross margin and improving operating leverage demonstrate the increasing scalability of our model, giving us greater confidence in long-term, profitable growth.”

More Room for Upside

Several investment companies posted a bullish stance on Heartflow Inc. (NASDAQ:HTFL), having raised their price targets and issued positive ratings as the company noted the under-penetrated market, which continues to provide a strong backdrop for further growth.

Stifel raised its price target to $45 from $40 prior, while maintaining a buy recommendation, thanks to the company’s second-quarter revenues, which exceeded its $56.7 million projection and the consensus estimate of $56.6 million.

JPMorgan also hiked its price target to $45 from $35 previously, while maintaining an overweight rating.

Wells Fargo, for its part, upgraded its price target to $39 from $37, saying that Heartflow Inc.’s (NASDAQ:HTFL) full-year guidance may be two times larger than the beat, but still holds room for upside.

Higher Hedge Fund Participation

Institutional investors also appeared to be bullish about the company’s long-term growth prospects, with the number of hedge funds jumping alongside capital commitments.

Data from Insider Monkey showed that 25 hedge funds held positions in Heartflow Inc. (NASDAQ:HTFL) in the first quarter of the year, up from only 16 in the quarter prior.

More importantly, their combined holdings soared by 55 percent to $232.9 million from $150 million quarter-on-quarter, signaling that professional investors are increasing their exposure while positioning for further upside.

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While we acknowledge the potential of HTFL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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In a statement early last week, the listed firm said that it grew its revenues by more than fivefold to $582.3 million from only $105.1 million in the same period last year, and also beat the $572.75 million expectations from analysts.

It was by far the strongest quarter, with deals yielding an average of more than $20 million per megawatt.

The rally signaled high optimism for the company’s growth prospects, having shunned the firm’s swing to a net loss of $190.4 million from a $584.4 million net income year-on-year, dragged by higher operating costs and expenses.

For illustration purposes only. Photo by Brett Sayles on Pexels

Further Expansion

The company has hinted at expanding further next year to capture a significant share in the surging demand for AI infrastructure.

According to Nebius Group NV (NASDAQ:NBIS) CEO Arkady Volozh, the company is raising its year-end contracted power target to 5 GW, and is planning to deploy more than 1 GW per year of capacity beginning next year.

Nebius Group NV (NASDAQ:NBIS) successfully closed four major AI cloud contracts in the second quarter of the year. From $20 million per megawatt at present, newer opportunities are targeted to boost pricing to a range of $40 million to $50 million per megawatt.

“We could sell our entire 2027 capacity on these terms today. We are deliberately not doing so because we see higher value in retaining some capacity for immediate customer needs,” he said.

Analysts, Hedge Funds Bullish

Following the results, three analysts recommended investors buy the shares, two of which raised their price targets.

One, on the other hand, assigned a more conservative hold rating.

Northland Securities became the most bullish among last week’s coverage of the company, raising its price target by 65 percent to $410 from $248 previously, while maintaining a buy recommendation.

Citigroup followed with a 16.5 percent price target hike to $324 from $278 prior, while also reaffirming a buy call.

Bank of America also suggested that investors buy its shares, while assigning a price target of $310.

On the other hand, Morgan Stanley only issued a hold recommendation at a price target of $144, or a 48 percent discount from its closing price of $277.68 on Friday.

As for hedge fund positioning, data from Insider Monkey showed that the number of hedge funds holding positions in the company increased to 60 in the first quarter of the year from 54 in the fourth quarter of 2025.

More importantly, their combined holdings soared by 123 percent to $2.36 billion from only $1.06 billion quarter-on-quarter, signaling that while more hedge funds are establishing exposure, they are committing a significant amount to the company over its rosy growth prospects.

The first quarter of the year has already signaled a sharp increase in institutional investors. Assuming the second-quarter data reveal more hedge fund positioning, it would provide another indication that Nebius Group NV’s (NASDAQ:NBIS) rally is more than just a short-term growth story.

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While we acknowledge the potential of NBIS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Much of the jump came on Thursday, following the announcement, as investors snapped up shares after the offer price was placed at $20.25—or a 49 percent premium over its closing price on Wednesday. It was the second-highest gainer last week.

Photo by Tima Miroshnichenko on Pexels

6% Ticking Fee

Another clause of the agreement also helped attract shareholder buying.

According to Accelerant Holdings (NYSE:ARX), it would pay Class A and B shareholders a ticking fee at a rate of 6 percent per annum if the closing of the transaction is delayed by certain pending insurance regulatory approvals.

The transaction is expected to be completed in the first half of the year, subject to customary closing conditions, including regulatory and shareholder approvals.

Upon closing, Accelerant Holdings (NYSE:ARX) is set to become a private company and no longer trade on the New York Stock Exchange.

Entities affiliated with Altamont Capital Partners—which currently own a combined 82 percent of the listed firm’s stake—intend to retain their equity ownership alongside Thoma Bravo, the terms of which will be finalized prior to closing.

Strong Q2

The acquisition plan followed the strong results of Accelerant Holdings’ (NYSE:ARX) earnings performance in the second quarter of the year, with its net income soaring by 511 percent to $80 million from only $13.1 million in the same period last year.

Total revenues also increased by 63 percent to $356.9 million from $219.1 million year-on-year.

“Our second quarter financial results highlight the attractive growth and durability of our business,” Chief Finance Officer Linda Huber said.

“Exchange Written Premium grew 23 percent year-over-year, and trailing twelve months premiums are now $4.6 billion. Our fee-based operating revenue and adjusted EBITDA, which we define as consolidated results less the underwriting segment, increased 56 percent and 91 percent, respectively, compared to the 2025 second quarter. We look forward to working with Thoma Bravo to grow the business alongside our employees, Members, and Risk Capital Partners,” she noted.

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While we acknowledge the potential of ARX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Last week, we heard from both McDonald’s and Restaurant Brands International, the parent of Burger King… McDonald’s kicked things off last Tuesday morning, delivering a fairly tepid set of numbers. Their global same-store sales were up 1.3%, basically in line. US comps were only up a disappointing 0.8%. McDonald’s saw its consolidated revenue rise 4% to $7.1 billion. That’s a slight miss versus expectations. Their operating income was exactly in line, too. Although they did manage a very modest 6-cent earnings beat off a $3.32 basis. CEO Chris Kempczinski blamed the company’s U.S. weakness on poor execution.

He has a plan to turn things around by improving the taste and quality of McDonald’s food while overhauling their beverage platform, improving throughput, and coming up with new marketing. At least they know there’s a problem and they’re trying to fix it. I like that. That’s why the stock actually rallied in response to the quarter. And I don’t blame anyone for buying the stock because down here, it trades at 21 times earnings, 2.7% yield. The stock’s a lot cheaper than it used to be. Although from my perspective, it’s become a show-me story. Unusual.

Operational Performance and Executive Strategy at McDonald’s 

McDonald’s Corporation’s (NYSE:MCD) second-quarter earnings report highlighted specific execution missteps that eroded domestic foot traffic. Systemwide sales reached $37 billion globally, supported by active user expansion across digital loyalty programs. However, management mentioned during the earnings call that domestic weakness stemmed from an overly crowded promotional calendar spanning major global sports partnerships as well as new product rollouts, which clogged restaurant operations and slowed kitchen service times.

Furthermore, an inconsistent franchisee pricing rollout of the Every Day Affordable Price menu under $3 coincided with a reduction in digital flash deals. To address these operational bottlenecks, Skye Anderson was appointed as President of McDonald’s USA. Management emphasized on a structural shift in marketing, steering the operational focus toward improving food quality, scaling proprietary beverage platform initiatives, and optimizing digital reward frameworks.

Analyst Rating and Bearish Realities for McDonald’s 

Macroeconomic pressures continue to weigh on the broader quick-service industry, with persistent wage inflation and reduced dining frequency among low-income households compressing store-level margins. As per Investing.com, on August 5, Bernstein SocGen Group revised its price target on McDonald’s Corporation (NYSE:MCD) down to $295 from $310 while maintaining a Market Perform rating. The firm pointed to prolonged domestic traffic softness and delayed value recovery. With it being valued at 21 times earnings and offering a 2.7% dividend yield, valuation multiples sit below historical averages, yet sluggish domestic momentum leaves the thesis dependent on operational execution.

Institutional Sentiment and Short Interest Profiles for McDonald’s

Insider Monkey 13F tracking data shows institutional hedge fund ownership moving to 83 funds in the first quarter of 2026, down from 91 funds in the fourth quarter of 2025. The prominent shareholder in Q1 was Arrowstreet Capital after increasing its stake by 18%. On the short side, McDonald’s Corporation (NYSE:MCD) has a short float of approximately 1.66%. That minimal short positioning shows Wall Street is not aggressively betting against the company. Investors are instead looking at it as a steady defensive anchor while management works through its operational reset. Whether the stock goes back to its historical premium depends on how quickly new leadership can streamline store operations and restore store-level foot traffic.

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While we acknowledge the potential of MCD as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Bull Case: A Pill For Every Patient

The clearest proof point arrived later on August 10, when the UK’s Medicines and Healthcare products Regulatory Agency approved Foundayo, Lilly’s oral GLP-1, for weight management and type 2 diabetes. It made Britain the first European market to greenlight the pill, and the stock rose nearly 4% on the news. Foundayo arrived second to Novo Nordisk’s oral Wegovy there, but it carries one edge: patients don’t need to fast for 30 minutes before taking it, unlike Wegovy’s tablet. Lilly said Foundayo is now under regulatory review in more than 40 additional countries, with a global rollout expected across major markets in 2027.

Lilly is also stacking distinct treatments instead of leaning on one blockbuster. Zepbound remains the injectable leader, Foundayo serves needle-averse patients, and retatrutide, which just posted positive results across three Phase 3 trials, is being positioned for people who need deeper weight loss or have complications like sleep apnea. More than 80% of Foundayo prescriptions have gone to patients who had never taken a GLP-1 before, meaning Lilly is expanding its market rather than cannibalizing Zepbound. That breadth showed in the numbers: second-quarter revenue climbed 48% year-over-year, adjusted EPS hit $8.38, and management raised full-year revenue guidance to $85 billion to $87 billion.

Bear Case: Paying Up For Perfection

None of this comes cheap. Lilly trades at 32.47 times forward earnings as of August 14, well above the 18.5 times average for healthcare stocks, a multiple that assumes growth keeps compounding without a stumble. Mounjaro and Zepbound alone made up 65% of second-quarter revenue, so a slowdown in either would hit harder than it would a more diversified peer. There’s also a pricing trade-off inside the growth: average realized prices across Lilly’s GLP-1 portfolio fell 13% year over year, largely because the company keeps cutting prices to widen access, including a Zepbound price cut last December. Volume more than offset it, up 60% over the same stretch, but that formula depends on demand staying just as price-sensitive going forward.

Competition is building too. Novo Nordisk had Wegovy’s pill on the UK market two months before Foundayo arrived, and its next-generation CagriSema is coming, even though a head-to-head trial showed Zepbound beating it. Semaglutide’s patent protection also expires this year in India, China, and Brazil, opening the door to generic rivals in fast-growing markets.

What The Smart Money Sees

Hedge fund ownership of Eli Lilly slipped from 137 funds to 132 in the most recent quarter, a modest pullback rather than a rush for the exits. Short interest sits at just 1.02% of the float, suggesting almost no organized bet against the stock. The stock’s forward price-to-earnings ratio confirms investors are still paying a growth premium even as fund positioning cools.

The Next Chapter Turns

Eli Lilly has turned a single weight-loss drug into a multi-product platform spanning injectables and pills, while regulators keep clearing new markets for Foundayo. The raised guidance and the Medicare access expansion both point toward more patients affording these drugs going forward. But the valuation leaves little cushion, and a portfolio still concentrated in two drugs means the bear case hinges on whether rivals like CagriSema or generic semaglutide start pulling volume away.

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While we acknowledge the potential of LLY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Cramer opened his commentary by pointing out how Wall Street leadership, including Goldman Sachs CEO David Solomon, aligned with NVIDIA Corporation (NASDAQ:NVDA) CEO Jensen Huang to champion data center assets as long-lasting collateral:

Today, we’re learning about the possibility of institutions offering compute bonds. This time, trading compute, that’s a data center asset class, not unlike those securitizations in auto loans. There’s Jensen Huang, CEO of NVIDIA, talking about the viability of the data center, long-lasting value of the chips in these warehouses full of servers. Then you had a series of titans of finance talk about how logical the whole thing is. Then David Solomon, the CEO of Goldman Sachs, piped up and pushed them too.

Securitization Mechanics and Asset Durability

To digest the mechanics of these proposed instruments, Cramer highlighted that compute bonds operate under the exact same structural framework as mortgage-backed or auto loan securities:

What you didn’t hear, or at least I didn’t hear until I digested it, was that these would be securitizations, just like securities backed by home loans or auto loans. Hence the strong endorsement of Goldman’s David Solomon who can see the logic… Now, you may be wondering, will these pieces of paper be backed by the full faith and credit of Jensen Huang and NVIDIA? That’s very funny, but no. But neither are the securities based on auto loans or home loans. There’s a construct at work here, though. There’s a belief that the assets don’t depreciate quickly, if at all.

Comparing Microchip Resilience to Automobile Depreciation

Expressing strong personal confidence in the asset class, Cramer argued that graphics processing units produced by NVIDIA Corporation (NASDAQ:NVDA) retain value far better than traditional vehicles. He said:

I can tell you I’m a believer. The NVIDIA chips that are at the core of the data center haven’t shown much depreciation at all… Older models have held up better than cars which are worth less than the moment they leave the lot… At the beginning, it wouldn’t shock me if NVIDIA itself took down bonds by the tens of millions, augmenting their cash program while demonstrating their fidelity. I know that’s what I’d do.

A New Asset Class Catering to Yield-Hungry Investors

Concluding his analysis, Cramer called the invention of compute bonds a brilliant financial strategy, comparing its disruptive potential to gold, real estate, and residential mortgages. He remarked:

If there are losses, NVIDIA would absorb them. But then again, I don’t think there will be. Instead, I think Jensen Huang and his confederates have invented a whole new asset class like gold, like real estate, like home loans, like auto loans. Oh, and let me just say one thing: I think it’s brilliant. I believe these notes will entice people who want a little extra yield. And there are a lot of money managers who love to chase yield, whether you think that’s a good idea or not.

Depreciation Realities and Technology Obsolescence Risks

While bullish commentators view compute bonds as a groundbreaking yield generator, skeptics warn that securitizing hardware carries some structural risks. Unlike real estate or physical gold, semiconductor technology inherently faces rapid technological obsolescence. If next-generation architecture delivers significant efficiency leaps, existing server clusters housing older chips from NVIDIA Corporation (NASDAQ:NVDA) could experience sudden valuation write-downs, which could impair the underlying collateral backing these debt notes.

Furthermore, risk analysts warn against comparing physical data center hardware to consumer loans. If end-user demand for AI inference or model training cools down, secondary market rental rates for compute power could decline significantly.

Smart Money Backing 

While fixed-income skeptics warn of hardware depreciation risks, institutional smart money continues increasing its footprint in the semiconductor king. NVIDIA Corporation (NASDAQ:NVDA) was held by 275 hedge funds in Q1 2026, up from 264 funds in the prior quarter, showing rising high-conviction backing across active money managers.

At the same time, the short percentage of float for NVIDIA Corporation (NASDAQ:NVDA) sits at a minimal 1.26%. Despite lingering macroeconomic debates, broad market bears means few investors are betting against the stock.

NVIDIA Corporation (NASDAQ:NVDA) remains the central pillar of the artificial intelligence trade. While financial engineering around compute bonds introduces new fixed-income variables, steady hedge fund accumulation and modest short seller presence provide a durable backdrop. If data center hardware maintains its structural value, it could keep validating Cramer’s bullish vision for the chip titan.

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While we acknowledge the potential of NVDA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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READ NEXT: Jim Cramer Discusses Retailers He Likes: Williams-Sonoma (WSM) and Ralph Lauren (RL) and Jim Cramer Endorses Lockheed Martin as “Sensational”.

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Okay, you got to step up from that bad corn to Silver Queen corn. You know what that means? You got to go into General Motors. I don’t even think of Stellantis as being investable right now. But GM? Wow. Make the move. Make it tomorrow.

Executive Leadership Drives Cramer’s GM Conviction

Cramer’s preference for General Motors Company (NYSE:GM) over Stellantis N.V. (NYSE:STLA) stems directly from his trust in chief executive execution. During the April 17 episode, when a caller showed intent to invest in the industry and asked whether they should invest in the EV or ICE industry, Cramer responded:

I’ll tell you something, you want to invest in, this is the way I look at the autos… but I want you to invest in Mary Barra. Mary Barra is amazing. She’s an incredible person who is a great CEO, the great CEO of General Motors. If she weren’t running GM, I don’t know if I would ever recommend it because I think she’s that sensational. You buy the stock of General Motors and don’t worry, she’ll take care of whether it should be electric or not. She’s amazing.

Comparing Bear Cases: Structural Friction vs. Legacy Cyclicality

For Stellantis N.V. (NYSE:STLA), the bear thesis revolves around severe operational missteps. High North American dealer inventory backlogs, aggressive price discounting, and volatile cash flows have eroded profit margins. The company’s ultra-low valuation could be viewed as a value trap, as earnings misses threaten payout safety and highlight multi-year brand restructuring drag.

On the other hand, the bear case for General Motors Company (NYSE:GM) focuses on cyclical macroeconomic pressures and capital allocation risks. Another thing that could be noted is the slowing pace of consumer EV adoption, rising production costs, and potential margin compression in its core truck and SUV segments. While GM’s valuation remains inexpensive, the question arises whether execution alone can offset broader automotive demand headwinds.

Hedge Fund Sentiment 

Hedge fund positioning tracked by Insider Monkey highlights stronger institutional backing for General Motors Company (NYSE:GM) despite broader auto sector headwinds. General Motors Company (NYSE:GM) was held by 77 hedge funds in Q1, down slightly from 81 in the prior quarter. In contrast, hedge fund sentiment for Stellantis N.V. (NYSE:STLA) dropped from 34 holders in Q4 2025 to 32 in the following quarter, showing weaker smart money conviction.

Valuation and short positioning further show the divergence between the two automakers. Stellantis N.V. (NYSE:STLA) trades at a forward P/E ratio of 13.40x with a short interest of float sitting at 3.63%. On the other hand, General Motors Company (NYSE:GM) offers a much lower forward P/E ratio of 6.64x and a lower short interest of 2.29% of float, showing that market bears remain far less aggressive against GM.

Stellantis N.V. (NYSE:STLA) remains bogged down by operational headwinds, higher valuation multiples, and declining hedge fund interest. While both legacy automakers face cyclical challenges, GM’s cheaper valuation, lower short float, and strong leadership under Mary Barra present a far more compelling alternative.

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While we acknowledge the potential of GM and STLA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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READ NEXT: Jim Cramer Discusses Retailers He Likes: Williams-Sonoma (WSM) and Ralph Lauren (RL) and Jim Cramer Endorses Lockheed Martin as “Sensational”.

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Bull Case: Betting Big On Digital Growth

NiSource’s growth story increasingly runs through data centers rather than traditional rate base additions. In June, the Indiana Utility Regulatory Commission approved the original Amazon special contract along with its related power purchase agreement, and in July it approved the company’s Alphabet partnership too, with load expected to ramp toward full capacity by 2030. Those two agreements alone are projected to return about $1.4 billion in bill reductions to existing NIPSCO electric customers over the life of the contracts, or up to $124 a year for an average residential bill, with savings starting as early as the fourth quarter of 2026. Demand keeps building behind that: management pointed to 3 gigawatts of large-load customers in active negotiations, another 2 gigawatts with clear line of sight, and a broader 9 gigawatt pipeline.

Despite the weak quarter, NiSource reaffirmed 2026 adjusted EPS guidance of $2.02 to $2.07 and its long-term growth rate of 6% to 8% through 2030. The company also flagged more than $40 million in cost optimization work already identified. Economic momentum is showing up outside the utility too, with Virginia landing more than $1.7 billion in new aerospace and defense manufacturing investment.

Bear Case: Storms And Costs Pile Up

The quarter’s earnings decline was not just a rounding issue. Management pointed to higher operations and maintenance spending tied to an unusually active storm season, calling 2026 a record year for tornadoes across its service territory, along with elevated costs to keep its workforce steady during ongoing union negotiations. Regulatory risk is also showing up in less predictable places. In June, NiSource received a third federal order requiring it to keep running the Schahfer coal plant, and the company is now trying to recover those compliance costs through a FERC filing, with approval sought within 60 days. Rate cases filed in Virginia and Kentucky will not see decisions until the first half of 2027, leaving those investments in limbo for months.

Funding the buildout is not free either. NiSource’s five-year plan calls for $21 billion in base capital spending plus $7.6 billion tied to its data center customers, supported by roughly $400 million to $600 million of annual equity issuance and a targeted FFO to debt ratio of 14% to 16%. And in Indiana, affordability discussions tied to the GenCo strategy were only just getting underway as of August 7, meaning the regulatory framework around the company’s biggest growth driver is still being negotiated.

What Wall Street Sees

Hedge fund ownership of NiSource slipped from 50 funds to 47 in the most recent quarter, a modest pullback rather than a rush for the exits. Short interest sits at just 3.57% of the float, suggesting little organized skepticism toward the stock. As of August 14, shares trade at a forward price-to-earnings ratio of 20.83, a premium that assumes the data center pipeline converts into earnings largely as promised.

The Bet Investors Are Making

NiSource is asking investors to look past a rough quarter and focus on a data center pipeline regulators keep approving. Management’s reaffirmed guidance assumes the Amazon and Alphabet ramps will offset a stretch of storm damage and coal plant costs. But the unresolved Schahfer recovery and delayed Virginia and Kentucky rate decisions are reminders that a regulated utility does not fully control its own timeline. Whether the data center bet outpaces those cost pressures should start to show up in results as those two contracts ramp toward full capacity in the coming years.

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While we acknowledge the potential of NI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In.

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Apparently, the monarch is making a comeback because Burger King is running circles around the Golden Arches right now… They posted 3.8% comps… same-store sales growth. Wall Street was only looking for 3. Their total revenue was in line, but their operating income was better than expected, up 7%, and they delivered a 3-cent earnings beat off a $1.04 basis… The problem with Restaurant Brands is that it’s a house of different chains besides Burger King… There’s also Tim Hortons and Popeyes and Firehouse Subs. Now, some of these other brands are not doing that well…

It was Burger King that saved the story. It’s on fire at 8.6% same-store sales growth in the US and Canada, trouncing the 6.2% number that the analysts were looking for. And total adjusted operating income for Burger King was up double digits, up 13%. They are truly running rings around McDonald’s right now. Ultimately, the weakness in the rest of Restaurant Brands, especially Tim Hortons and Popeyes, was enough to cancel out the strength of Burger King. That’s why the stock tumbled 2% in response to the quarter. But in terms of burger chains, it is clear that McDonald’s has been left in the dust…

In May, we had Burger King President Tom Curtis on the show, and he explained what’s starting to go right for the chain… Basically, he said the company, it was just listening to the customers… It led to menu improvements, including a revamp of the iconic Whopper as well as store refreshes and an eye on value… And that’s why they’re putting up excellent same-store sales growth.

Portfolio Pressures and Management Execution at Restaurant Brands

The operational friction inside Restaurant Brands International Inc. (NYSE:QSR) is due to uneven performance across its multi-brand umbrella. While Burger King delivered an 8.5% comparable sales increase in the United States, helped by executive strategies outlined by brand president Tom Curtis during his May appearance regarding listening closely to consumers, modernizing restaurant spaces, and prioritizing intentional value propositions, sister banners faced deceleration.

Tim Hortons posted virtually flat comparable sales growth at 0.1%, with incremental top-line additions heavily tied to supply chain transactions passing higher commodity costs to franchisees rather than organic foot traffic gains. Meanwhile, Popeyes experienced a fifth consecutive period of domestic contraction with comparable sales slipping 5.2%. Management has leaned on capital return programs, declaring a third-quarter dividend of $0.65 per share. According to management during the Q2 2026 earnings call, the company returned a total of $435 million to shareholders during the quarter through dividends and share repurchases.

Sell-Side Evaluations and Bear Case Realities

Market skeptics analyzing Restaurant Brands point toward broader quick-service industry traffic declines, with consumer discretionary spending impacted by persistent inflation and rising menu costs across the fast-food sector. As per MarketBeat, on August 7, Scotia lowered the price target on Restaurant Brands International Inc. (NYSE:QSR) from $83.00 to $81.00 while maintaining a Sector Perform rating. The firm noted that valuation multiples trade near 26 times earnings with a dividend yield around 3.6%, yet sluggish momentum in secondary brands leaves the overall recovery dependent on operational execution.

Institutional Positioning and Structural Ownership 

Examining hedge fund allocations provides additional depth into how smart-money investors view Restaurant Brands International Inc. (NYSE:QSR). According to Insider Monkey hedge fund tracking elite hedge funds, the number of hedge funds stood at 31 during the first quarter of 2026, compared to 36 funds in the fourth quarter of 2025. Bill Ackman’s Pershing Square has been the top shareholder for the past few quarters, with 22.6 million shares in Q1. Meanwhile, short interest hovers near 5.19% of the total float. Investors seem to continue to treat it as a steady dividend compounder supported by a mature global footprint, even as short-term traders navigate the uneven growth rates separating Burger King’s turnaround from its sibling restaurant chains.

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Bull Case: A Business Firing On More Cylinders Than Ever

For its fiscal third quarter, Symbotic posted revenue of $721 million, up 22% year-over-year and 7% sequentially, near the high end of its own forecast. Net income came in at $55 million, a sharp reversal from a $21 million loss a year earlier, while adjusted EBITDA more than doubled to $95 million from $45 million. The company started 11 new system deployments in the quarter, including a second site for beverage distributor Southern Glaciers, pushing its total to 77 systems in deployment and 56 already operational.

Growth is also broadening beyond the core hardware business. Software revenue jumped 57% year over year to $13 million, and operation services revenue climbed 49% to $37 million, both signs that Symbotic is making more money per site as systems mature. The Walmart (NYSE:WMT) relationship keeps expanding too, with the brake pack each-picking system now live at half of Walmart’s regional distribution centers and a new FirstSim Micro system beginning installation for ecommerce fulfillment. Add in recent tuck-in acquisitions of Box Robotics and ARMS Innovations, and Symbotic is stacking new revenue categories on top of its original warehouse automation business.

Bear Case: The Price Tag And The Doubters

None of that comes cheap. Symbotic trades at a forward P/E of 238.10 as of August 14, a multiple that assumes years of uninterrupted growth and leaves little room for a stumble. Short sellers appear to agree there is risk, with 28.10% of the float sold short, a level that signals a substantial bear camp rather than routine hedging. Cash also moved the wrong way, falling to $1.7 billion from $2 billion, which the company attributed to timing of project-related receipts and spending. Backlog dipped slightly to $22.5 billion, still enormous but a reminder that even fast-growing order books can shrink quarter to quarter as revenue gets recognized.

What The Smart Money Is Doing

Hedge fund ownership fell from 38 funds to 35 heading into this print, a modest but notable retreat even as the business itself accelerated. That decline sits awkwardly next to the short interest, since both suggest professional money has been trimming or betting against Symbotic right as its numbers improved.

Where This Leaves Investors

Symbotic’s quarter answered a lot of questions about execution, from Walmart expansion to margin gains to a growing software business. What it has not answered is whether the valuation already assumes all of that good news and more. For the bulls, continued deployment growth and new categories like FirstSim Micro would need to keep compounding at this pace.

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While we acknowledge the potential of SYM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In.

Disclosure: None. Follow Insider Monkey on Google News.