This article is based on TheStreet’s Stock & Markets Podcast. Hosted by Chris Versace, the veteran Wall Street investor and lead portfolio manager for TheStreet Pro, the weekly podcasts are available early to members of TheStreetPro investing club.
What the heck happened to 2025?
We seemed to have been popping open the champagne and watching the ball drop in Times Square at the end of 2024, but now we’re in the final quarter of 2025.
And while others may be making plans for the holiday season, some of the top names at TheStreet Pro were making their calls for the rest of the year during the Oct. 8 edition of the Stocks and Markets podcast.
From TheStreet Pro Team (l to r): Ed Ponsi, Jason Meshnick, James ‘Rev Shark’ DePorre, Chris Versace and Louis Llanes
Jason Meshnick, TheStreet Pro’s managing editor, hosted this edition of the podcast. He was joined by Chris Versace, lead manager of TheStreet Pro’s portfolio and regular podcast host, as well longtime contributors Louis Llanes, Ed Ponzi and James “Rev Shark” DePorre.
“This week we are combining the weekly Stocks and Markets Podcast with the quarterly meeting,” Meshnick said. “We’ve assembled the team here today to give us their top pick for the rest of the year.”
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AI Spending: Big Talk Vs. Real Results
“I think we’re in a phase right now where we really need to separate what is real and what is not real,” Llanes said. “There are a lot of firms out there that are talking big talks about AI spend.
“What we want to do is we want to find those companies that actually are showing that they’re getting results from the R&D.”
Llanes said he has been looking for companies that are spending at least 10% of their revenue on research and development.
“They’re growing revenue quarter over quarter on the year,” he said. “So, they’re showing acceleration of growth. That positive cash flow. And the return on capital is solid above average.”
Llanes said he was buying a basket of 107 companies that adhere to these requirements.
“How do you know that they’re being successful by monetizing that R&D spend?” Versace asked. “How are you measuring who’s going to be successful monetizing this R&D that they’re putting in?”
“One study does actually show that there is a lag,” Llanes said. “And it’s usually about a year or two. So, what you want to see is companies that have more sustainable edges. You have to get into qualitative work. There’s no two ways about it.”
Versace discussed the importance of AI infrastructure.
“I still think we’re relatively early innings, but that’s something that is constantly on my mind,” he said.
“As we get more (artificial intelligence personal computers), as we get more, robust applications on smartphones and, of course, enterprise adoption, you’re going to see that enterprise consumer adoption continue to grow,” Versace added, referring to the process of integrating new technologies, practices and strategies into a company’s core operations.
TheStreet Pro’s Rev Shark Favors Biotech
DePorre said he favored biotechnology stocks.
“Biotechnology has been a dog for a couple of years,” he said. “It’s lagged. It hasn’t kept pace with the overall market. It’s just been a terrible sector for a very long time. However, it’s finally starting to come to life now.
“And I think that many of the stocks in the sector are not as overvalued or as excessive as some of the technology names.”
The conversation turned to comments by the hedge fund manager Paul Tudor Jones, who likened the market to the environment that existed in 1999, just before the bubble peak that occurred in early 2000.
DePorre noted that in 1999, people were concerned about Y2K, a computer bug that was predicted to cause a global technological collapse when the year changed to 2000. This disaster did not happen.
“There was this huge amount of liquidity that was being created to deal with the disaster that that was supposed to be,” he said. “And we’re getting a similar kind of thing now with the [Federal Reserve easing interest rates]. The liquidity Jones talked about, that’s going to drive this, and in a lot of ways that parallel to the Y2K thing is very interesting.”
“I’ve had that feeling for a while,” Ponsi said. “I think it’s liquidity. You have high liquidity, and you have lowering interest rates at the same time. It’s a very explosive recipe. Stocks just seem to go higher. There’s no reason why that shouldn’t continue for the entire fourth quarter and into next year.”
“Talk to me six months from now,” he added. “Maybe things will change. But if we believe what Mr. Jones is saying, and I’ve always felt that’s where we are right now, you’ve got to go with large-cap tech.”
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