Investors should prioritize GE Vernova (GEV) as a high-conviction play on AI data center power demand, following an 85% increase in earnings and a 71% surge in orders. Within healthcare, UnitedHealthcare (UNH) is the preferred turnaround candidate due to its ability to reprice premiums, while Molina (MOH) should be avoided due to rising costs from a sicker Medicaid pool. Be cautious with Fair Isaac Corp (FICO) and Blackstone (BX), as FICO has lost its mortgage score monopoly and BX is seeing significant slowdowns and rising defaults in its private credit division. In the housing sector, Meritage Homes (MTH) offers a value opportunity as it trades below tangible book value while aggressively buying back shares. Avoid "buying the dip" in software stocks like ServiceNow (NOW) or IBM, as the sector faces structural risks from AI-driven workforce reductions that threaten traditional per-seat pricing models.

Blackstone (BX)

• Blackstone reported a beat on distributable earnings ($1.36 vs $1.34 expected), but the stock moved lower due to weak performance metrics in its private credit and real estate divisions. • B-Cred (Blackstone’s $81B flagship private credit fund) saw a significant slowdown in inflows, dropping from a 2025 average of $1B per month to just $230M in April. • Non-accruals in the private credit portfolio increased to 1.4%, with specific write-downs noted for Medallia (marked at 60.3 cents) and Affordable Care (marked at 69.8 cents).

Takeaways

• Monitor Private Credit Health: The flat performance and increasing non-accruals suggest the "golden era" of private credit may be facing headwinds from portfolio company stress. • Real Estate Caution: Negative returns in opportunistic real estate (-90 bps) indicate continued pressure in the property markets despite high overall assets under management.

Fair Isaac Corp (FICO)

• FICO has historically held a monopoly on the consumer lending score process, but the FHFA recently announced that Fannie Mae and Freddie Mac will now accept Vantage Score as an alternative. • This effectively ends FICO’s "Classic" score as the sole approved metric in the mortgage world. • Steve Eisman revealed he has been short FICO for several months.

Takeaways

• Competitive Threat: The loss of monopoly status is a structural shift. The stock has already dropped over 40% this year, and the "bull case" that pricing grids would favor FICO has been proven wrong. • Sector Sentiment: This is a major disruption to a long-standing "moat" in the financial services industry.

Managed Care & Health Insurance (UNH, ELV, MOH)

• The industry appears to be turning a corner after a period of high medical costs. • UnitedHealthcare (UNH): Reported a strong beat ($7.23 EPS vs $6.57 expected). The "bull case" relies on its ability to reprice insurance premiums quickly to offset high medical loss ratios (MLR). • Elevance (ELV): Reported a beat, but it was driven by non-recurring investment income. 2026 estimates still suggest a 15% EPS decline. • Molina (MOH): Beat expectations but faces "Medicaid attrition." As the government prunes Medicaid rolls, the remaining pool of insured people is sicker, which could drive up future costs.

Takeaways

• UNH as a Turnaround Play: Investors are rewarding UNH for signs of stabilization in its MLR, though issues remain in its Optum division due to new Medicare pricing systems. • Molina Risk: Be cautious with MOH; the sicker "cohort" of remaining Medicaid members poses a risk to 2026/2027 earnings.

GE Aerospace (GE) & GE Vernova (GEV)

• GE Aerospace: Benefiting from a massive expansion in commercial aviation. Orders were up a staggering 87% ($23B). • GE Vernova (GEV): A play on the "AI Data Center" theme. Data centers require massive amounts of electricity, which drives demand for gas turbines. • GEV reported an 85% increase in EPS and a 71% increase in orders.

Takeaways

• The AI Power Theme: GEV is positioned as a primary beneficiary of the U.S. electrical grid expansion. While the 2026 PE is high (80x), the "long tail" of the business provides multi-year earnings visibility. • Industrial Strength: Unlike software, the industrial sector (specifically aerospace and power) shows robust, tangible growth in orders.

Software Sector (NOW, IBM)

• Sentiment in software is described as "precarious." • ServiceNow (NOW): Despite 22% revenue growth, the stock dropped 13% after hours because of a small (75 bps) headwind in the Middle East. • IBM: Software revenue was "in line," but the market sold off the stock because it wasn't a significant beat.

Takeaways

• Avoid "Bottom Fishing": Eisman warns against trying to buy the dip in software right now. The market is unforgiving of even minor misses. • AI Structural Risks: There is a growing concern that AI will lead to "seat contraction" (fewer employees needed, thus fewer software licenses sold), which threatens the traditional per-seat pricing model.

Homebuilders (DHI, MTH, PHM)

• Higher interest rates (driven by inflation and oil prices) have crimped the spring selling season. • Meritage Homes (MTH): Trading below its tangible book value ($75). • DR Horton (DHI) & Pulte (PHM): Results were "less bad" than feared, leading to a relief rally.

Takeaways

• Value in Homebuilders: The sector is unloved due to high rates, but companies like MTH are aggressively buying back shares and trading at attractive valuations relative to their assets.

Tesla (TSLA)

• The stock is currently split between "fundamental" bears (focusing on the auto business) and "visionary" bulls (focusing on autonomous vehicles and robots). • Tesla's 2026 PE is over 200x.

Takeaways

• High Risk/Reward: The stock is driven by Elon Musk’s promises of future tech rather than current car sales. Increased CapEx ($25B+) on AI and robots is a point of contention for investors concerned about cash flow.

Investment Themes & Macro Insights

The "Recession" Question

• Based on earnings from over 100 companies and credit data from large banks, Eisman concludes there is no evidence of a looming recession. The economy remains generally healthy.

The U.S. Deficit Risk

• Addressing concerns about a collapse in the Treasury market, Eisman remains skeptical of "alarmists." He notes that Japan’s debt-to-GDP is double that of the U.S. and their markets function well. As long as there is no liquid alternative to the U.S. Treasury, the "calamity" is unlikely to occur.

AI's Impact on Software

• Incumbents vs. Newcomers: Large software companies will likely survive, but their ability to raise prices and grow "seats" is under threat. • Sales Costs: AI reduces coding costs (R&D), but it does not reduce the cost of sales and marketing, which is the largest expense for most SaaS companies. This protects incumbents from being easily displaced by "one-man" AI startups.