Maintain a bullish outlook on the S&P 500 (SPY) as record 20% operating margins and strong tech earnings offset high valuation concerns. Within the payments sector, avoid struggling legacy names like PayPal (PYPL) and Fiserv (FI) in favor of the "impregnable" networks of Visa (V) and MasterCard (MA). In the AI infrastructure space, prioritize companies raising guidance like AMD (AMD) and Rockwell Automation (ROK), while noting that Palantir (PLTR) offers a potential value opportunity following its 22% year-to-date decline. Be cautious of FedEx (FDX) and UPS (UPS) as Amazon (AMZN) aggressively scales its logistics network to capture their market share. For energy and aerospace exposure, Diamondback Energy (FANG) and Transdigm (TDG) remain high-conviction plays due to significant earnings growth and raised financial outlooks.

S&P 500 Index (SPY)

• The S&P 500 is showing significant strength, driven by a "K-shaped" economy where tech, industrials, and financials lead while the lower-end consumer struggles. • Revenue Growth: All 11 sectors of the S&P 500 posted stronger Q1 2026 growth than analysts predicted at the start of the year. • Margins: Operating margins for the S&P 500 are at an all-time high of 20%, up from 16% in 2023. • Valuation: While traditional metrics like the Shiller PE (currently >40x) suggest the market is expensive, Eisman argues this is skewed by the fact that high-multiple Tech now makes up nearly 50% of the index.

Takeaways

• Recession Fears: Eisman believes a recession is not imminent because revenue and margins are expanding simultaneously, and bank credit quality remains "benign." • Tech Dominance: As long as Tech reports strong numbers, the overall market math remains bullish because the sector's weight in the index is so high.

Palantir (PLTR)

• The stock is down 22% year-to-date despite strong fundamentals, primarily due to "AI fears" affecting the software sector. • Earnings: Reported a massive beat with EPS at $0.33 (vs. $0.13 last year) and revenue up 85% to $1.63 billion. • Valuation: Even after the price drop, the stock trades at a 2026 PE ratio of 100x.

Takeaways

• Software Sentiment: There is a major disconnect between Palantir’s performance and its stock price. Eisman notes that "anything in software is problematic" right now due to negative AI narratives, regardless of actual results.

Amazon (AMZN)

• Amazon is aggressively expanding its logistics network to serve non-Amazon sellers (industrial manufacturers and other retailers). • This move directly competes with traditional carriers.

Takeaways

• Bearish for Peers: This expansion caused FedEx (FDX) to drop 8% and UPS (UPS) to drop 9% in a single day. Amazon’s scale makes it a massive threat to the traditional parcel shipping industry.

GameStop (GME) & eBay (EBAY)

• GameStop made a surprise $60 billion bid for eBay (a mix of cash and stock) at a 20% premium. • Context: eBay is four times the size of GameStop. Eisman expects eBay to reject the offer. • Michael Burry: Noted investor Michael Burry sold his entire GameStop position following the news, citing concerns over the massive debt levels required for such an acquisition.

Takeaways

• High Risk: The deal is viewed as highly improbable and potentially value-destructive for GameStop due to the debt burden.

Payments Sector: Visa (V), MasterCard (MA), PayPal (PYPL), Fiserv (FI)

• PayPal: Struggling to compete with Apple and Google Pay. Guidance was "really bad," projecting a 9% EPS decline. The stock is down over 20% this year. • Fiserv: Showing no signs of a turnaround; organic revenue growth was negative 4%. • Visa & MasterCard: Eisman views these as the only safe plays in the sector.

Takeaways

• Sector Strategy: Avoid "problematic" legacy payment processors like PayPal and Fiserv. Stick to the "impregnable" networks of Visa and MasterCard.

AI Infrastructure: Arista Networks (ANET), AMD (AMD), Eaton (ETN), Rockwell (ROK)

• Arista Networks: Reported strong growth (EPS up 34%), but the stock fell because guidance was only "in line" with expectations. • AMD: Reported impressive 43% EPS growth and strong Q2 projections, causing the stock to jump 15% after hours. • Eaton: Disappointed the market with weak Q2 guidance; the stock was punished despite being an AI data center play. • Rockwell Automation: Strong "beat and raise" quarter with 9% organic sales growth.

Takeaways

• High Expectations: In the AI sector, "in line" guidance is often treated as a failure. Investors should look for companies like Rockwell or AMD that are actively raising future outlooks.

Private Equity & Credit: Apollo (APO) & KKR (KKR)

• KKR: Reported solid results with $28 billion in new fundraising. • Apollo: Had a mixed quarter. While fee-related income was up 30%, spread-related income (from its insurance arm Athene) fell 13% due to higher funding costs. • Transparency: Apollo is moving to provide daily pricing for its private credit assets, a major shift for the "opaque" industry.

Takeaways

• Software Risk: Eisman warns that many Private Equity firms are overexposed to software companies bought at high valuations. If these companies are now worth 50% less, lenders may force PE firms to inject more cash or walk away. Apollo is noted as having the least exposure to this specific risk.

Other Notable Mentions

• Transdigm (TDG): A strong performer in the aerospace aftermarket parts space; raised guidance and beat earnings. • Diamondback Energy (FANG): Benefiting from higher oil prices; expected to grow EPS by over 100% in Q2. • Disney (DIS): Results were "okay" (8% EPS growth), but Eisman highlights that the stock price is essentially flat over the last 10 years. • Whirlpool (WHR): A "disaster" report; slashed guidance by nearly 50%, citing the war in Iran as a factor. • Fair Isaac (FICO): Eisman criticized the company for raising credit scoring prices by 1,500% over five years, calling it "egregious monopolistic" behavior.