CNBC Halftime Report
2026-08-13 · Hosted by Scott Wapner · CNBC
Executive Summary
Stocks rose broadly Wednesday as in-line CPI eased near-term rate-hike fears and AI infrastructure earnings from CoreWeave and Super Micro validated the bull case. Strategist Ed Yardeni raised his S&P 500 year-end target to 8,400 from 8,250, citing unprecedented upward revisions to earnings expectations. Joe Terranova of the investment committee highlighted a 96% buy-rating consensus and a 303 average price target on Nvidia ahead of its earnings in two weeks, projecting 114% earnings growth and $47 billion in free cash flow (cash left after covering operating and capital costs), while noting the stock trades at its cheapest relative valuation in roughly seven years despite the growth.
Key Stories & Changes
1. Yardeni Raises S&P 500 Target to 8,400 on Earnings Momentum
Ed Yardeni's new target of 8,400, up from a prior 8,250, which he had called potentially conservative at the time
Cited unprecedented consensus earnings-expectation increases for current and coming years since mid-2025, describing an "earnings-led meltup"
Shannon Sikosha noted forward profit margins approaching 17%, up from roughly 10% five to six years ago, and flagged that Broadcom and Micron have joined Nvidia in the S&P's top-10 earnings contributors
Joe Terranova cited FactSet data showing tech's second-biggest weekly inflow ever, driven by hedge fund clients amid continued deleveraging/degrossing
Tech earnings beat rate cited at 85.1% per Needham
2. AI Infrastructure Validation Continues: CoreWeave, Super Micro, Nvidia Setup
CoreWeave and Super Micro both beat and raised guidance, extending the week's AI infrastructure earnings validation theme alongside Nvidia's financing news
Nvidia earnings due in two weeks; Joe Terranova cited 96% buy ratings, a 303 average price target, consensus revenue growth reaccelerating to 96% (best in nearly 12 months), projected earnings growth of 114%, free cash flow of $47 billion, and a next-quarter revenue guide expected near $100 billion
Nvidia described as cheapest relative to earnings growth in roughly seven years, with 230 cited as a technical ceiling it needs to break through
Goldman Sachs reiterated its Nvidia buy rating with a 285 target
Elon Musk/SpaceX reportedly directing chip purchases toward Nvidia, described as a new demand source "not underwritten a month ago"
CRWV: CoreWeave — Sharply higher — Beat-and-raise reinforced AI infrastructure trade validation
SMCI: Super Micro — Higher — Strong current-period guide
NVDA: Nvidia — Higher — Cheapest relative valuation in ~7 years ahead of earnings in two weeks
3. Cisco's Optical AI Story Ahead of Earnings
Cisco reporting earnings that night; Brian Belski's firm has held the stock roughly 10 years, citing consistent cash flow, dividend, and growing AI development narrative
Belski attributed Cisco's strength to its participation in AI infrastructure via optical components, not just networking hardware; cited Coherent up 59% month-to-date and Applied Opto up 84% year-to-date as sector confirmation
Noted a not-yet-confirmed FCC consideration to limit Chinese optical imports, which would benefit U.S. optical suppliers including Cisco and Corning
4. Software Rebound Debated Ahead of Key Earnings
Cybersecurity names (CrowdStrike upgraded to $230 target, Palo Alto to $415, Octa upgraded) cited as maintaining strength through the software sector's correction and recovery
Belski maintains skepticism on broader software until hearing from Salesforce (Aug 26), Oracle (Sept 9), and Adobe (day after Oracle); sees Oracle as the "problem child" that triggered the group's troubles roughly a year ago
Shannon Sikosha more constructive, arguing enterprises will rely on existing software stacks (rather than replacing them) to implement AI, favoring the software application layer broadly (e.g., IGV ETF) as LLMs commoditize
5. Financials Seen as Next Earnings Leadership Rotation
Belski's firm published a note buying into the financials rebound, highlighting broker-dealers, Bank of America, and Goldman Sachs
JPMorgan hit a fresh all-time high; Bank of America highlighted for strength in wealth management (Merrill Lynch) expected to be a focus over the next six to nine months
Firm trimmed Fifth Third in its value portfolio (up 30%) on loan-book concerns despite maintaining ~32-33% financials weighting
6. Los Angeles Lakers Sold for Reported $12.5 Billion
Josh Kushner and Bob Iger's consortium buying the majority stake from Mark Walter, who bought the team for $10 billion less than a year ago (a then-record valuation)
Deal notable for lacking a competitive auction process, unusual for a trophy asset of this size
Analyst Mark Ganis (SportsCorp) called it "stunning" given Walter's history of buying, developing, and holding assets (e.g., the Dodgers); speculated the sale may relate to an ongoing federal/SEC investigation into Walter's insurance holdings, though this is unconfirmed
NBA's looser private-equity and sovereign-wealth ownership rules (vs. NFL) cited as a driver of higher valuations across the league
Comparisons drawn to the Seattle Seahawks' recent ~$10 billion sale to Vinod Khosla and the Yankees' Apollo investment
7. Notable Analyst Calls of the Day
McDonald's: Wolf Research bullish technical setup targeting $300; Belski's firm owns it and expects strong second-half U.S. growth despite flat traffic
Lowe's: BofA reiterates underperform, $124 target vs. $153 price, despite stock up 56.5% YTD; Belski's firm prefers Walmart and has Lowe's on a trim list
Hilton: Upgraded to buy, target raised to $365 from $360
General Dynamics and Boeing: Cited as top picks on robotics/defense and international order growth, respectively
Entegris: Upgraded at Deutsche Bank, $200 target, cited as an AI-adjacent chip-materials play
Trends Identified
1. Earnings Revisions, Not Multiple Expansion, Are Driving the Rally
Multiple committee members emphasized that the market's advance is being powered by historically unprecedented upward earnings revisions rather than rising valuation multiples — Joe Terranova cited the largest earnings revisions he's seen in over 30 years of tracking the data. This distinction matters because it suggests the rally has fundamental underpinning even as index levels hit records.
2. The AI Trade Is Broadening Beyond Pure-Play Chipmakers
Cisco's re-rating around its optical-networking AI exposure, alongside strength in Coherent and Applied Opto, illustrates how the AI infrastructure theme is spreading into adjacent hardware categories (optical, networking) beyond GPUs and Neo Clouds. This broadening is also visible in financials and industrials tied to data center power buildout.
3. Software Sector Recovery Remains Contingent, Not Confirmed
While cybersecurity names have sustained their rebound on budget-resilience fundamentals, the committee is explicitly withholding a broader bullish call on software until Salesforce, Oracle, and Adobe report later in August and September. This reflects lingering scars from a roughly year-long correction that began with Oracle.
4. Data Center Power Buildout Faces Rising Political and Regulatory Risk
A Bank of America note flagged Texas — previously one of the most construction-friendly data center markets — as facing new political risk, while New York's data center moratorium and a Caterpillar downgrade over potential CapEx impacts show regulatory pushback is becoming a real, if not yet dominant, headwind to the infrastructure buildout story. ---
Sentiment Analysis
Overall Market Sentiment: Bullish
The committee was broadly optimistic, anchored by Yardeni's raised S&P target and strong AI infrastructure earnings, though tempered by explicit caution around Nvidia's elevated pre-earnings expectations and unresolved software-sector questions.
Risk Factors Highlighted
Elevated pre-earnings expectations for Nvidia: Committee explicitly warned of volatility "on the other side of earnings" given how far the stock has already run into the print.
Software sector credibility gap: Broader bullish software calls are being withheld pending results from Salesforce, Oracle, and Adobe.
Data center regulatory/political pushback: Texas grid-connection pauses and New York's moratorium threaten to slow AI infrastructure buildout.
Fifth Third loan book concerns: Cited as the reason for trimming the regional bank position despite a 30% gain.
Lakers sale opacity: Financing details and the seller's motivations remain undisclosed, with speculation tied to an unrelated federal/SEC investigation.
Valuation multiple ceiling: Analysts noted the market previously entered the year at a ~23x multiple that may not be repeated, implying limited further multiple expansion.
Cash-heavy investor positioning: A Wall Street Journal report cited $3 trillion sitting in retail money market funds, a sign of continued investor caution despite record index levels.
This episode was covered in today's [The Market Signal — 2026-08-13](https://marketsignal.beehiiv.com/p/the-market-signal-2026-08-13), a cross-source synthesis of multiple podcast reports.