A bullish forecast suggests Silver could reach triple-digit prices early next year, driven by both precious metal and industrial demand. As the AI theme shifts from hardware to software, consider Salesforce (CRM) as a potential catch-up investment that is expected to be part of this next leg. In retail, look at sneaker company On Holdings (ONON) for its strong order book and attractive valuation, with a PEG ratio of just 0.7x. Another opportunity may exist in turnaround stories like Gap (GPS), which has seen success from improved execution. Finally, an allocation to regional banks could be a strategic play on the expectation of a steepening yield curve, which typically boosts bank profitability.

S&P 500 Index Outlook

• Steph Guild, CIO at Robinhood Strategies, shared her market outlook for 2026.
• Her target for the S&P 500 for year-end 2026 is 7,300, which suggests a roughly 7% return from current levels. This is described as a "tempered" or "cautious" outlook.
• The caution stems from the belief that the largest companies (like the MAG7) will not be the biggest winners next year. She expects higher returns to come from other areas of the index that are not as heavily weighted.
• Her analysis involved lowering the earnings growth expectations for the tech sector from 23% down to 18%, resulting in an overall S&P 500 earnings growth expectation of 12% for the year.
• To reach her 7,300 target, she applied a 22x price-to-earnings multiple, which she noted makes her "uncomfortable" as it is historically high, but questions if it's the "new norm."

Takeaways

• Investors should be prepared for more modest, single-digit returns from the overall S&P 500 index in 2026 compared to the strong performance of recent years.
• The market's leadership may be shifting away from the mega-cap tech stocks. This suggests that a broad, market-cap-weighted index fund might not perform as well as it has.
• The discussion highlights the importance of stock picking and looking for value in less-appreciated sectors, as the tailwind of falling interest rates that has boosted all stocks is no longer present.

Artificial Intelligence (AI) Sector

• The podcast discussed the "three stages of AI": 1) Hardware, 2) Software, and 3) Seeping into the economy.
• The hardware phase (data centers, power, chips) has gone on for much longer than initially expected.
• A key risk factor mentioned is the amount of debt being taken on in the AI space, particularly in the private credit market, which is making the strategist "nervous for next year."
• The next leg of the AI trade is expected to be the "agentic AI" or software phase, where companies in sectors like financials, insurance, and healthcare begin spending to integrate AI to increase productivity.
• The market is believed to have started recognizing this shift on October 29th, which caused some market volatility. This transition to a new phase is expected to cause the market to be "jostled around."

Takeaways

• The initial, easy money in the AI hardware phase (e.g., chipmakers) may be slowing down.
• Investors should start looking for companies in traditional sectors (finance, healthcare, etc.) that are poised to be the biggest beneficiaries of implementing AI software to improve their business. These are considered the "next leg" of the AI trade.
• Be aware of the risks associated with the high levels of debt used to finance the AI buildout, as it could create skepticism and volatility.

Retail / Consumer Sector

• The discussion highlighted a "K-shaped economy" and growing affordability issues for the consumer, which are expected to be a major theme next year.
• The sentiment is that certain beaten-down retail brands look "kind of interesting."
• Gap (GPS):
  • Robinhood Strategies has been owning GPS all year.
  • The stock's comeback is attributed to better execution under a new CEO who started in 2023.
• Lululemon (LULU):
  • This is a recent addition to their portfolio. The stock is up significantly since they initiated the position.
  • It is acknowledged as a position that is "not without risk."
  • The company has been hurt by tariffs and some execution issues.
• On Holdings (ONON):
  • This sneaker company is a newer position, added in the last week or two.
  • The stock was down on the year when they bought it.
  • The investment thesis is based on a strong order book, good management through tariffs, and an attractive valuation with a PEG ratio of only 0.7x.

Takeaways

• There may be opportunities in the retail sector by focusing on specific companies with strong execution rather than the sector as a whole.
• Look for value in companies that have been beaten down but are showing signs of a turnaround, like Gap (GPS).
• For growth-oriented retail, consider names like On Holdings (ONON) that appear to have strong fundamentals and an attractive valuation relative to their growth (low PEG ratio).
• Be mindful of the risks in higher-valuation names like Lululemon (LULU), which can be sensitive to execution missteps and macroeconomic factors like tariffs.

Cryptocurrencies

• Bitcoin (BTC):
  • The transcript notes BTC has had a tough time recently, pulling back from a high of $125,000 to below $90,000.
  • The hosts believe there may be an "unwind" happening in the assets that drove the last leg of the rally.
  • Robinhood customers, who are typically younger, are reportedly "buying the dip" on Bitcoin, and buying has been relatively steady.
• Ethereum (ETH) and Ripple (XRP):
  • These two cryptocurrencies are mentioned as consistently competing for the #2 most-traded spot on the Robinhood platform, behind Bitcoin.
• Portfolio Allocation:
  • Steph Guild's Robinhood Strategies portfolios do not currently hold crypto.
  • The decision was based on the fact that crypto had already run up a lot by the time the strategies launched, and she was concerned about adding that level of volatility to the portfolios during an uncertain time.

Takeaways

• Bitcoin is experiencing significant volatility and a pullback from recent highs. While institutional sentiment in the podcast seems cautious, retail investors on Robinhood are continuing to buy.
• For investors interested in crypto beyond Bitcoin, Ethereum (ETH) and Ripple (XRP) are shown to have significant trading interest from the retail community.
• Crypto remains a highly volatile asset class. Even professional managers may avoid it during uncertain market periods due to its potential to dramatically increase portfolio volatility.

Commodities (Gold & Silver)

• Gold:
  • The rally in gold is primarily attributed to record purchasing from central banks, not just retail investors.
  • Robinhood customers are buying gold through gold ETFs, but it is not a top trade for them compared to crypto.
• Silver:
  • Silver is described as "getting in on the party" and is viewed not just as a precious metal but as an industrial metal with important uses.
  • Podcast contributor Guy Adami made a specific, bullish prediction: "I think you're going to see triple-digit silver early next year."

Takeaways

• The strong, underlying demand for gold from central banks provides a strong fundamental support for its price, suggesting the trend may continue.
• Investors looking for exposure could consider gold ETFs.
• Silver is presented as having a dual tailwind: speculative interest similar to gold, and rising industrial demand. The prediction for "triple-digit silver" is a very bullish, specific call, implying a significant upside from current levels.

Specific Stocks & Sectors Mentioned

• Salesforce (CRM):
  • Mentioned as a name that has been "so disappointing" because it should be benefiting from the AI trend but hasn't yet.
  • The speaker believes it will be part of the next leg of the AI trade, but it's taking time for the company to integrate the technology in a high-quality way.
• Regional Banks:
  • Robinhood Strategies owns regional banks in its portfolios.
  • The investment thesis is based on the expectation of a steep yield curve, where the Fed cuts short-term rates but long-term rates remain high (around 4-4.25% on the 10-year Treasury). A steep yield curve is typically profitable for banks.
• Healthcare Sector:
  • This is a sector they began adding to in October as a "Growth at a Reasonable Price" (GARP) play.
  • They believe AI can be a significant helper in this sector.
  • Specific holdings mentioned include Eli Lilly (LLY) and Natera (NTRA).
• China Tech:
  • They still like China Tech and hold it in their portfolios, viewing it as a way to make money and as a hedge in case China finds a way to compete with US AI dominance without access to the best chips.
  • It's acknowledged that the trade "hasn't been working more recently" but is still up for the year and seems "attractively valued."

Takeaways

• Salesforce (CRM) could be a "catch-up" trade for investors looking for exposure to the software side of AI, though patience is required.
• An allocation to regional bank ETFs or stocks could be a way to play the specific macroeconomic view of a steepening yield curve.
• The healthcare sector is viewed as an undervalued area with potential AI-driven upside.
• Investing in China Tech is presented as a contrarian and potentially "unpatriotic" view, but one that offers attractive valuation and a hedge against US tech concentration. It comes with high geopolitical risk but potential reward.

Emerging Investment Products

• Event Contracts / Prediction Markets:
  • This is a new product category being heavily promoted by Robinhood, allowing users to trade on the outcomes of real-world events (e.g., elections, Fed rate decisions, economic data, sports).
  • Steph Guild, the strategist, stated she "absolutely" wants to incorporate event contracts into the Robinhood Strategies portfolios.
  • She views them as a valuable hedging and diversification tool. For example, instead of buying regional banks to express a view on a Fed cut, one could use an event contract to make a more direct and precise trade on the event itself.

Takeaways

• Event contracts are an emerging tool that can be used for more than just speculation.
• Sophisticated investors may begin to use these products to hedge specific event risks in their portfolios or to express a view on an outcome more directly than is possible with traditional stocks or bonds.
• As these products become more mainstream on platforms like Robinhood, they could become a common part of a diversified investment strategy.