Mid-Morning Look

Thursday, October 02, 2025

U.S. stocks hitting fresh all-time highs for the S&P 500 and Nasdaq on the open, building on the prior 5-month worth of gains as investors continue to pour money into global stock markets. The first economic data point casualty of the government shutdown (in day 2 now) was weekly jobless claims while the nonfarm payroll data tomorrow is also expected to be delayed. Tech an early leader with Semis (SOX) new record highs (NVDA as well), while the enthusiasm over the AI investment trade continues higher after OpenAI has been valued at $500B after a $6.6B transaction allowing employees to sell equity, highlighting the frothy, self-reinforcing cycle in private AI markets. Outside of early strength in technology, energy and materials are also strong while defensive sectors such as consumer staples, REITs and utilities are leading lower. Among top stories this morning are monthly delivery numbers for TSLA/RIVN in EV space, credit bureau names hit hard (EFX, TRU) after FICO announces plan for direct licensing of mortgage scores, more strength in crypto (Bitcoin related names) and rate sensitive biotech and solar on growing expectations of lower interest rates by the Fed in coming months.

• In Solar/Alternative Energy: ARRY was downgraded from Overweight to Equal Weight at Barclay’s revisiting the fundamentals after the macro and potential changes to IRA drove much of the stock price performance but on a go-forward basis, thinks company execution will be more of a focus and upgraded SHLS to Overweight given the growth opportunities presented by the BESS and data center demand. BE was downgraded to Neutral from Buy at Mizuho (raise tgt to $79 from $48) following run-up in shares owing to improved visibility for Bloom Energy’s demand growth with utility-scale orders for data centers.
• In Transports: Barclay’s trimmed Transport estimates again into Q3 results as weak industrial growth and continued oversupply temper sector yield and margins; M&A a relevant topic for rail investors and the firm upgraded CHRW to Equal Weight as the company delivers AI-enabled efficiency gains. Deutsche Bank previewed Q3 transports as well saying they see challenges remaining in the near term and therefore see risks to 2026 earnings estimates; the firm said they prefer names that have idiosyncratic tailwinds, which can: Drive positive earnings revisions, even absent a cycle uplift (CHRW, XPO, FDX).
• In Chemicals: AXTA was downgraded to In Line from Outperform at Evercore ISI saying it faces challenges as refinish destocking continues and industrial softness persists with FY25 guidance under threat and FY26 outlook looking tough. Citigroup upgraded CE to Buy from Neutral with a $53 tgt while the firm downgraded OLN to Neutral from Buy with a $25 price target. CTVA was upgraded to Overweight at JP Morgan saying they do not believe that the split announcement has lowered the value of Corteva while believes the sharp decrease in the value of Corteva has created an undervaluation of the company.

• BLSH +5%; announced the upcoming launch of crypto options trading expected on October 8, bolstered by a consortium of day-one trading partners.
• BSY +6%; will replace WU in the S&P MidCap 400, and Western Union will replace Mr. Cooper Group Inc. (COOP) in the S&P SmallCap 600 effective prior to the opening of trading on Monday, October 6
• FICO +23%; launched its Mortgage Direct License Program, which gives tri-merge resellers the option to calculate and distribute FICO Scores directly to their customers, “eliminating reliance on the three nationwide credit bureaus.”
• NBIS +4%; after Bloomberg revealed more details on its previously announced deal with MSFT including access to >100,000 NVDA GB300 GPUs; includes using NBIS’ data centers to run large language models. Microsoft investing $33B in neoclouds (Nebius, CoreWeave, Nscale, Lambda) to ease the AI crunch.
• RUN +2%; shares rallied after a report in The Information said Sunrun and Tesla residential batteries could help power data centers https://tinyurl.com/3wmh5754
• SHLS +9%; upgraded to Overweight at Barclays given the growth opportunities presented by the BESS and data center demand; revised its FY27 numbers higher and now see a potential opportunity for an increased topline and margin growth rate in the years to come.
• STLA +8%; reported late Wednesday its first quarterly growth in the U.S. this year, with new car sales up 6% in the period saying its Jeep, Chrysler, Ram and FIAT brands all saw sales growth.

• EIX -3%; was downgraded from Buy to Hold at Jefferies saying they do not see shares as offering compelling risk/reward with higher percentage wildfire risk than peer PCG, a slower growth profile, and Eaton Fire liability exposure.
• EFX -8%; along with weakness in EXPGY and TRU after FICO launched its Mortgage Direct License Program, which gives tri-merge resellers the option to calculate and distribute FICO Scores directly to their customers, “eliminating reliance on the three nationwide credit bureaus.”
• NFLX -2%; falls sharply a second day following recent Elon Musk comments against company due to programming choices.
• RIVN -6%; reported Q3 deliveries 13,201 units vs estimate 12,690 units and said produced 10,720 units in Q3 while they narrowed their 2025 delivery outlook range to 41,500-43,500 vs estimate 42,420 units.
• TSLA -1%; shares rallied initially as Q3 deliveries rose 7.3% y/y to 497,099 (vs. 463K in Q3’24), well above est. around 443K. The official company-compiled analyst consensus was 443,000 deliveries, but that includes a lot of estimates that weren’t updated later in the quarter. Most delivery estimates from analyst who recently updated their estimates are between 460,000 to 490,000 deliveries.