The cracks in the AI bubble are getting harder to ignore and the voices calling them out are getting louder.

For months, we’ve warned investors that sky-high AI valuations are built on expectations of extraordinary growth while mounting debt and expenses get conveniently hidden off the books.

Now, the market is beginning to confront the gap between the AI narrative and economic reality.

The most important earnings season in years is upon us. Never in the history of the world have we seen such large corporate spending.

Finally, more investors are starting to see which companies are creating real value and which are struggling to keep up appearances.

As we’ve written extensively, companies have gone to great lengths to hide liabilities and expenses from their earnings. Their efforts are wasted on us and our clients, but it’s clear the rest of the market has not caught on.

Eventually, investors will catch on…hopefully before they become Wall Street’s bag holder. When capital leaves overvalued, bubble-like stocks, it moves towards fundamentally strong businesses with attractive growth prospects.

Read our latest research below to see where we’re uncovering hidden risks, challenging market expectations, and finding opportunities that offer attractive Risk/Reward as the AI trade begins to unravel.

Long Idea:

Despite long-standing competitive advantages and attractive growth prospects, the stock price of this week’s Long Idea implies that the company’s profits will never grow.

S&P 500: Earnings Lower and Valuation Higher Than You Think

See how hidden debt, and its associated expenses, impacts the earnings and valuation of the entire market.

Earnings Watch Party Replay:

We’re helping our community avoid being Wall Street’s exit liquidity and bag holder by asking these questions: Are the real fundamentals improving or is the narrative hiding weakness? Are expectations getting ahead of reality? Which stocks offer the best Risk/Reward? Stocks discussed in this week’s Earnings Watch Party include META, TSLA, PG, GM, GE, PM, NFLX, VLO, RTX, IBM, SPCX, and more.

Sector Rankings for 4Q26:

We published our best and worst ETFs and Mutual Funds reports for each individual sector. See the recap here.

Style Rankings for 4Q26:

We published our Style Rankings report for 4Q26 – see the best and worst rated styles this quarter.

Model Portfolio Updates:

We updated our Safest Dividend Yields Model Portfolio.

Danger Zone Podcast:

CEO David Trainer joined Chuck Jaffe to discuss why the entire S&P 500 is in the Danger Zone this week.

We hope you had a great week!

See a preview of upcoming research below.

Upcoming Research