Halftime Report – Brad Gerstner Live (1/6/26)

Podcast: CNBC Halftime Report
Host: Scott Wapner
Main Guest: Brad Gerstner, Founder/CEO of Altimeter Capital
Investment Committee Panel: Joe Terranova, Shannon Saccocia, Brian Belski, Josh Brown
Date: January 6, 2026

Episode Overview

This episode focuses on the current state and outlook for the equity markets as the Dow targets its first close above 49,000. Brad Gerstner joins to share his market views, particularly around the AI megatrend, technology infrastructure, and stock-picking in an environment shifting from broad, momentum-driven gains to more nuanced, earnings- and fundamentals-driven returns. The panel discusses sector rotation, tactical investing, and notable opportunities in financials, semiconductors, and software.

Key Discussion Points & Insights

1. Bank Rally and Capital Markets Cycle

• Banks & Financials Outperformance:
  • Josh Brown starts by emphasizing the remarkable performance of major banks and investment houses at the start of 2026, attributing gains to massive M&A activity, IPOs, and capital formation globally.
  • Quote: “Banks are an AI winner in multiple ways... We’re in a better, healthier, more rational capital market cycle.” (Josh Brown, 02:13)
• Global Trend: The capital formation boom is not unique to the US; major deals and billion-dollar AI startups are also appearing in Europe and Asia.

2. More Challenging Market Dynamics Ahead

• Valuation Concerns & S&P 500 Leadership:
  • Shannon Saccocia notes dispersion within tech, with semiconductors outperforming software, and that 2026 may see new sector leaders.
  • Earnings-Driven Market:
    • Brian Belski positions 2026 as a transition year from a momentum/multiple expansion market to one driven by earnings.
    • Quote: “Year three of the bull market is usually the worst in the first five years.” (Brian Belski, 07:01)
    • Expects high single-digit to low double-digit returns, sector rotation to value, dividend growth, and small/mid-cap names with strong free cash flow and M&A potential.

3. The Shift to Tactical, Stock-Pickers’ Market

• Joe Terranova:
  • Emphasizes tactical opportunities across trust banks, exchanges, fintech, and, in particular, semiconductors, which are showing strength despite FAANG downdrafts.
• Broader Take:
  • Quote: “You’re actually looking at the fundamentals of the companies... It means dispersion — it’s a good sign in this disruptive, innovative environment.” (Shannon Saccocia, 11:20)

Brad Gerstner Interview – The 2026 Playbook

4. AI Supercycle & Golden Age of Margin Expansion

• Backdrop:
  • Gerstner lays out a bullish “operating framework” for the year: supportive macro (lower taxes, falling rates, contained inflation), strong earnings growth, two major supercycles (AI & reindustrialization/reshoring), and widespread margin expansion as companies deploy AI.
  • Quote: “This is going to be a stock pickers market... There’s a lot to be excited about.” (Brad Gerstner, 12:57)
• Nvidia & AI Infrastructure Playbook:
  • Nvidia is primary holding due to continued robust earnings—not reliant on multiple expansion.
  • CapEx Growth:
    • 2023: $150 billion spent by hyperscalers; 2026: $500+ billion in hard orders for new infrastructure.
    • Quote: “People, it’s hard to believe, but we’re underestimating... The total CapEx here... This year, over $500 billion.” (Brad Gerstner, 15:46)
  • AI winners: Nvidia, TSMC, Hynix, Samsung, Amazon, Microsoft, CoreWeave, Google.
  • On CoreWeave Concerns:
    • Market is overly bearish; firm is a strategic AI leader, but Gerstner acknowledges it’s a riskier bet vs. staple AI infra plays.

5. Selective Exposure – Meta, Alphabet, and Amazon

• Meta (Facebook):
  • No current position after huge gains post-2022 activist letter and turnaround.
  • Quote: “They’re not market leaders today in AI... They have some catch up work to do.” (Brad Gerstner, 19:22)
  • Prefers names with obvious AI catalysts, lower multiples, and higher 2026 growth impetus.
• Alphabet (Google):
  • Still a top holding, praises “mental flexibility”—willingness to change opinions as Google catches up in AI (Gemini momentum, significant Nvidia GPU usage).
  • Quote: “Google was the greatest business in the history of capitalism, but they needed to get their act together when it came to AI. Well, they got their act together…” (Brad Gerstner, 21:40)
• Amazon:
  • Still “super cheap” with AWS growth set to accelerate thanks to massive Nvidia infrastructure investment and successful Anthropic partnership.
  • On Anthropic: Not likely to be acquired, but both Anthropic and OpenAI likely to go public within 12–18 months.
  • Quote: “The investment in the backing of Anthropic early has proved to be incredibly wise... I think retail investors should have a shot at investing in the two most important companies in the world.” (Brad Gerstner, 24:47)

6. Where’s the AI Sweet Spot for 2026?

• Gerstner remains highly overweight core AI infrastructure, arguing that demand for intelligent computation is “off the charts” and shows no sign of being supply-satiated.
• Quote: “The entire compute stack... forevermore has to be accelerated because it has to produce tokens that can be intelligent. Otherwise, enterprises are not going to buy it.” (Brad Gerstner, 28:04)
• Touts Nvidia’s lead (“performance per watt”) and expresses skepticism that custom ASICs from hyperscalers will catch up soon.
• Cites Snowflake as an example of software that will benefit—a rare winner in an otherwise battered sector.

7. Software in a New Era – Generational Lows and the 90/10 Rule

• Software multiples have compressed dramatically (down to ~4x forward revenue from a peak of 17x).
• Many software applications will be disrupted/commoditized by generative AI, but key “substrate” companies (Snowflake, Databricks) will be major winners.
• Quote: “90% of the consensus is correct. 90% of the companies that are down deserve to be down. Find the 10% that got thrown out with the bathwater... I think those will be very good returning stocks this year.” (Brad Gerstner, 36:09)

Notable Quotes & Moments

• On Nvidia & AI Demand:
  • “He [Jensen Huang] just improved his inference performance by 5x, not even including Grok... If you’re coming after the king, you better have something a lot better.” (Brad Gerstner, 31:20)
• On Market Sentiment:
  • “The world is going to wring their hands just like they did in the early stages of Internet, early stages of social, and they’re going to say, oh, we have too much of this... The fact of the matter is every major enterprise in the world... has to build sovereign capability when it comes to AI.” (Brad Gerstner, 29:25)
• On Leadership and Mental Flexibility:
  • “One of my heroes in the business, Stan Druckenmiller... His greatest strength is he forgets the last shot. You have to have mental flexibility in this business.” (Brad Gerstner, 21:40)

Timestamps for Important Segments

• 01:00 – 06:00: Discussion of bank performance and broad macro themes
• 12:46 – 14:57: Brad Gerstner enters, lays out bull case, Nvidia's place in the AI cycle
• 15:15 – 17:41: AI infrastructure, CapEx and “supercycle” explained
• 17:41 – 19:22: CoreWeave risk/reward, differentiation among “Neo Clouds”
• 19:22 – 21:40: Why no Meta, Meta’s AI (under)performance
• 21:40 – 23:28: Alphabet’s AI trajectory & competitive landscape
• 23:50 – 27:17: Amazon’s AWS/Anthropic strategy, OpenAI/Anthropic IPO prospects
• 27:19 – 33:14: Joe: Where is the 2026 AI "sweet spot"? Gerstner: Stay the course in AI infra
• 36:09 – 39:04: Software sector: how to separate winners/losers in the "generational low"
• Final 10 minutes: Panel rapid-fire stock picks, commentary on rotation into asset managers, regionals, and outlook for 2026

Additional Panel Highlights

• Josh Brown’s Best Stocks:

  • Picks PNC and Fifth Third as super-regionals poised to benefit from growth, acquisitions, and wealth management expansions.
  • “They’re getting this kind of rerating... being treated less like regionals and more like larger banks.” (Josh Brown, 47:07)

• Joe Terranova's Trades:

  • Merck: Returning after 2024-2025 selloff, now views concerns as priced in.

• Final Trades:

  • Amazon, Asset Management (Brian Belski), Consumer Discretionary (Shannon Saccocia) cited as areas of focus.

The Takeaway

This episode serves as a masterclass in the current state of equity markets, emphasizing that 2026 is shaping up as a discerning investor’s year dominated by earnings, stock picking, and fundamental analysis. Brad Gerstner underlines the magnitude and durability of the AI buildout, but cautions to differentiate true infrastructure winners from the many companies likely to be left behind. Across the panel, there’s broad consensus: the market will reward specificity and skepticism, with valuation compression in tech and software opening doors for selective, high-conviction investing.

For more detailed market analysis, tune in live weekdays at 12–1pm ET or catch the replay via the Halftime Report podcast.