Title: Earnings Keep the Market Strong Despite Signs of Consumer Weakness | The Weekly Wrap Show: The Real Eisman Playbook — "The Weekly Wrap" (week ending Fri May 1, 2026; recorded Thu Apr 30) Guest: none (solo) Date: 2026-05-01 URL: https://youtu.be/P2sqSF9wZXU Length: ~28 min Note: Verbal fillers (um/uh/"you know"/false starts) removed; wording otherwise verbatim. Every (mm:ss) cue and all numbers/names kept. Auto-transcript garbles corrected: "realaismanplaybook"/"realvisionplaybook" = the Real Eisman Playbook; "Christopher Owen"/"Chris Faron" + "Todd Sohn" are Strategas strategists (Strategas is a private research firm — no ticker); "Vantage Score" is a product of the three credit bureaus (not its own ticker).
00:00 The UAE made the shocking, shocking decision to remove itself from OPEC. It is also a canary moment as worldwide alliances shift and reform. Charter lost 120,000 broadband subscribers in 1Q26. There is no way to sugarcoat the quarter. It was not a good one. Google, Microsoft, Amazon, and Meta all reported there is no slowdown in AI CapEx on the horizon.
00:25 Never forget that we are living in a K-shaped economy and that shows up in the results of companies like Domino's. When a pizza company shows weak same-store sales, it implies that the middle and low-end consumer is having a hard time. Hi, this is Steve Eisman and welcome to another edition of the weekly wrap.
00:53 This is for the week ending Friday, May 1, but recorded Thursday night, April 30th. I'm excited to share that in a few weeks we'll be announcing an additional feature to the Real Eisman Playbook alongside our existing Monday and Friday episodes. Thank you to everyone who has signed up for the mailing list on the Real Eisman Playbook and a confirmation email will be going out really soon inviting you to join the Founders Club.
01:21 I want to emphasize that Monday and Friday episodes will stay accessible at no cost on YouTube and all audio channels. The new features are something we've been building behind the scenes and we are excited to reveal them soon. The goal is to have more content and greater access to me and the community we are building together.
01:45 Visit the link to the Real Eisman Playbook in this episode's description or visit our website realeismanplaybook.com to sign up for our mailing list. As I mentioned before, signing up for the mailing list gives founder status when our new project goes live. Before we start the wrap, I want to address what happened to Charter on Friday of last week.
02:11 On Thursday and Friday of last week, Comcast and Charter reported. The results that Comcast reported on Thursday were mixed, but mostly okay, and the stock rallied. The results Charter reported on Friday were poor, and the stock declined 25%. Now, I recommended Charter in January at $223. The stock had a nice rally until Friday, but after Friday is now down 22% on the year.
02:39 I did not discuss Charter last week because I wanted time to digest what happened and then give you all my thoughts. My goal in sharing my analysis is to provide total transparency. I continue to own the stock as I did when I made the recommendation, and I have not changed my thesis. Whether or not I am proven right or wrong, it's important to me to share how I think about this investment.
03:02 I have said in the past that thesis creep is a major problem for investors, and I advise to always be aware of the tendency to change the thesis as the stock moves. In other words, have the tail wag the dog. My thesis, I want to emphasize, has not changed. First, let's quickly review the thesis. The thesis is part valuation and part turnaround.
03:24 Over the past few years, Charter has embarked on major CapEx to enhance its systems, and that CapEx is ending now. And as a result, total CapEx will decline from 11 billion in 2026 to 9 and 1/2 billion in 2027 and then 7 and 1/2 to 8 billion in 2028 and 2029. That decline in CapEx will enhance free cash flow dollar for dollar, and the company will use that cash flow to buy back stock with the possibility that the company will buy back literally 50% of its shares over the next four to five years. That is certainly doable given
04:01 that the company's market cap is only $23 billion. The stock is currently valued at a 2026 PE of four times. It is valued at less than two times free cash flow in those outer years and it has an almost get this 70% free cash flow yield in those outer years as well. Given the valuation, the market either does not believe that Charter's CapEx will decline and does not believe that they will buy back stock with their free cash flow or the market believes that EBITDA will somehow fall off a cliff.
04:34 Now, I don't believe that those eventualities are possible. Yes, Charter isn't expensive, ridiculously inexpensive. Prices if it will eventually go bankrupt. But, and this is the important but, an inexpensive stock does not necessarily make a good investment. Stocks remain cheap for a long time. I thought that after the fourth quarter broadband results came in better than expected, Charter had started a real turnaround story.
05:02 This quarter was unfortunately a setback. The data point that most investors focus on is changes in broadband subscribers. Charter lost 120,000 broadband subscribers in 1Q26, which was worse than the 100,000 loss estimate and double last year's losses. There is no way to sugarcoat the quarter. It was not a good one.
05:24 However, I believe that Charter is in a good position to turn the story around. The industry is moving to a world of convergence where cable and mobile phone service are offered as packages. Here, Charter has an advantage in that it is the low-cost provider. It offers cable and mobile for $100 a month versus 180 to 200 by its competitors.
05:48 So, I think this is a stock worth sticking with and I added to my position on Friday. I don't know when the turnaround will take place, but the stock is so inexpensive. In a sense, I'm being paid to wait. And now moving on to this week's wrap, we will discuss the war in Iran, the UAE resigning from OPEC and what it could mean, comments on the post-March rally, a comment on private credit, and the huge and I mean huge week for earnings across multiple sectors and we will discuss as many companies as we can so we can help ascertain the health of the
06:20 US economy. Not much news on the war. Over the weekend, there were no negotiations. Iran made a proposal to reopen the strait in exchange for ending the war and tabling negotiations on its nuclear program for later. President Trump, unsurprisingly, rejected the proposal but has not resumed bombing. It looks like the current US strategy is to maintain the blockage of the Strait of Hormuz, thereby putting economic pressure on Iran.
06:49 Because of this strategy, Brent crude oil prices have climbed above $115. Coincidence or not, the UAE made the shocking shocking decision to remove itself from OPEC. Saudi Arabia controls pricing and production of OPEC and the UAE is signaling not only that it has had enough, we've known for years that they strained under the constraints placed on them, but now they are signaling their willingness to go it alone and believe in their own strength.
07:19 Possibly, they are signaling a shift in alliances behind the scenes and this will continue to play out. It is also a canary moment as worldwide alliances shift and reform. We truly can't handicap this momentous political economic decision and the impact on oil and pricing. But at first glance, it seems like the UAE goal is to increase production, take advantage of the war, and grab market share.
07:46 We will have to wait for the behind-the-scenes motivations to be revealed. The market has had a big move since the end of March, and it's really worth commenting on. At the end of March, the S&P and Nasdaq were down 4% and 7% respectively for the year. But as of Thursday of this week, the S&P is now up 5% for the year, and Nasdaq is up 7% for the year.
08:10 Quite a rally. And this rally feels similar to what happened last year. If you recall, last year, the market had a big correction from late February through April 9th. And thereafter, the market staged a rally, which kept going with fits and starts through year-end. This year looks similar, almost to the exact date.
08:32 What's intriguing to me is that during the recent market correction, there were several commentators who were calling for a regime change. They argued that stagflation had arrived. Sell your index funds, they said. Sell your tech stocks. Buy energy and staples, they said. And yet, on this rally, the leaders were the same leaders of the last few years, tech stocks and banks.
08:58 And energy stocks and staples lagged. Regime changes are notoriously difficult to predict. Two additional points. First, gold has been acting weirdly. Normally, gold acts as a hedge against inflation and the demise of fiat currency. It should have rallied during the war, but it did nothing and is still doing nothing.
09:20 I'm not sure what this means, but it's worth watching. Second, semiconductors are now, get this, 16% of the S&P 500, an all-time high, which means it constitutes 46% of the entire infotech sector. In contrast, software is now only 8% of the S&P, down from its peak of 12% in August 2025. The high percentage of the S&P by semis also means that the overall market is easily swayed by any positive or negative news with respect to AI.
09:59 On Tuesday of this week, there was an article in the Wall Street Journal that Open AI missed its revenue targets. It was also reported that Open AI's CFO is nervous that Open AI will not be able to meet its massive data center commitments. That one news story caused a one-day correction in the semi subsector, the infotech sector, and Nasdaq.
10:25 This coming Monday, I will explore all of these market movements with Christopher Owen, chief market strategist at Strategas, and Todd Sohn, chief chartist at Strategas. So, check it out. Before we get to earnings, there was an interesting story in private credit. Ares Management, a publicly traded alternative asset manager, symbol ARES, owns a publicly traded private credit fund called Ares Capital Corp, symbol ARCC, which has 29 and a half billion in assets.
10:56 Ares hired an outside consulting firm to examine ARCC's software exposure. According to this outside consulting firm, 85% of ARCC's software loans are at low risk, 14% are at medium risk, and 1% is at high risk. The 14% and 1% problematic software loans equate to 3.3% of the entire portfolio, or 1 billion. Now, I have a problem with the way Ares categorizes these loans.
11:26 When they say that 85% of the software exposure is low risk, what exactly does that mean? Let's assume that means that the companies are performing fine right now. That's really not the issue. Let's use ServiceNow as a proxy for the sector. In July 2025, ServiceNow was priced at $209 a share.
11:50 It's now below 90, a decline of 60%. That implies that the value of all private equity software companies is less than half the purchase price. The equity values of software companies in ARCC's loan portfolio that are supposedly doing well are still worth less than half the original purchase price. Who is going to refinance the loans when the equity value is less than half? That is the key question.
12:19 And now onto earnings. Since we're talking about private equity, let's start with Blue Owl, which reported Thursday morning. The stock was up 10% on the print because the numbers were not a disaster and 19% of the float is short. I'd highlight two things. First, Owl reported a negative 40 basis point return for the quarter for direct lending.
12:41 This is the area that investors are focused on. And like ARCC, the question is not about the current marks, but who is going to refinance software loans when the equity is worth less than half. The other thing I'd flag is that Owl's equity-based comp increased 21% quarter over quarter and 15% year over year to $196 million coming in 50% above consensus estimates of 130 million.
13:11 That's a lot of stock-based comp to the management of a company whose stock is down 39% just this year alone. One more thing on stock-based comp. The entire sector of alternative asset managers reports adjusted earnings by adding back stock-based comp. Blue Owl, too. But Blue Owl uses a ton of stock base comp to such a degree that under GAAP accounting, the company is barely profitable. Next up is Domino's Pizza.
13:38 While a recession does not seem imminent at all, never forget that we are living in a K-shaped economy, and that shows up in the results of companies like Domino's. On Monday, Domino's reported and the stock was down 8%. The key metric, the key metric for any retailer is same store sales. Unfortunately, Domino's same store sales were up only 0.9% versus the expected 2.3% and earnings per share were down 5% versus last year.
14:28 When a pizza company shows weak same store sales, it implies that the middle and low-end consumer is having a hard time. Remember, the market is amoral. Domino's earnings are telling us that the bottom of the K consumers are in a deep recession. The fact that the market continues to trend up shows the disconnect between consumers and market movements. Buy the dip will be the mantra until proven otherwise, and as long as AI CapEx infrastructure spending pulls all the weight of GDP growth, the market seems generally willing to reflect the good news and discount the sad news. General Motors.
14:52 GM shows how well a stock can do when it is inexpensive and has a turnaround story. It's what I'm hoping for with Charter. In November 2023, GM stock price was $27. It's now $78. What happened? The company started to perform. Let's just look briefly at this quarter. GM reported its first quarter results, which saw beats across the board.
15:19 The company continues to navigate a difficult electronic vehicle backdrop. Total revenue came in at 43.6 billion, slightly above the street's estimate despite seeing a decline in its US automotive sales in the quarter of 10% year-over-year. Earnings per share came in at 370, well above the street of 260 and versus 278 last year, and the company raised guidance.
15:45 Moving on, Starbucks. This has been a turnaround story that stubbornly refused to turn around until perhaps this quarter. Starbucks reported its second straight quarter of traffic growth. EPS was 50 cents versus 42 cents expected and versus 41 cents last year. Revenue also beat. Same-store sales growth rose an impressive 6.2% largely because of North America. It also raised its full-year outlook. Impressive, and the stock was up 5% after hours on Tuesday night and up over 8% by the end of day on Wednesday and flat at the end of day Thursday. Investors are finally rewarding the company's business changes. I think the takeaway is that inflection points are hard to predict because real corporate changes take time to implement and catching any bottom or top at exactly the right moment is very difficult.
16:43 Now, let's talk about Visa. Yes, it is a K-shaped economy, but overall consumer spending is still strong. At least that is what Visa's results indicate. Visa's net revenue was up 17% versus last year, and that is the biggest percentage increase since 2022. Earnings per share of 331 was a beat and versus an expectation of 310 and up an impressive 20% versus last year.
17:13 The all-important payment volume metric was up a strong 9%. Visa, in my view, gives as good read on the consumer as any company in the world. For now, the picture that has emerged is that the consumer is still spending, but the middle and lower end consumers are having a hard time. Hence, the weak results at Domino's Pizza.
17:35 Full disclosure, I've owned Visa for years. FICO, Fair Isaac. This is a very controversial name, and full disclosure, I have been short for several months. Two Mondays from now, we will host a sell-side analyst who covers this subsector, and we will examine the FICO issues in depth. FICO reported Tuesday night.
17:56 The stock was up over 10% after hours Tuesday night, but faded on Wednesday, closing up only 3.4%. Now, FICO beat and raised guidance. On the call, management also said that it does not expect to lose mortgage market share to Vantage Score, the score created by the three credit bureaus. Losing or not losing mortgage market share to Vantage Score will determine the fate of this stock.
18:21 Here's why I think management's prediction that it will not lose share could be terribly wrong. In the next few months, the FHFA, the regulator of Fannie and Freddie Mac, will give final approval to FICO's new Score Ten T and to Vantage Score. Those are the two products that will compete head-to-head.
18:43 FICO will charge for Score Ten T 99 cents per loan application, plus $65 per funded loan. The three credit bureaus will charge only 99 cents per loan application for Vantage Score. This is a tremendous pricing difference. Here's why. On average, lenders will fund approximately 30% of their mortgage applications. So, for every 100 applications, FICO collects 99 cents times 100 plus $65 times 30, which is $99 plus $1,950 or $2,049 total. Vantage collects $0.99 times 100.
19:28 That's it, or $99 total. So, for every 100 loan applications, the pricing is $2,049 for FICO versus $99 for Vantage Score. Now, that's quite an enormous pricing difference. As for timing, both FICO Score 10 T and Vantage Score are being pilot program this year with full implementation scheduled for 2027.
19:53 The crazy part of this story is that FICO is a monopoly, but to generate its score, it pulls data from the three credit bureaus who are now its competitor. It's one thing to anger your competitors. It's another thing to anger your competitors by making money off their hard work when they are your suppliers. Moving on.
20:13 Bookings, a very good company. But last week, United Airlines and American Airlines lowered 2026 guidance because of the war. This week, Bookings reported and did the same thing. The actual reported results were fine with EPS growth of 15%. However, for the June quarter, the company cut its revenue growth outlook to four to 6% versus the consensus of 11% and the stock was down on this report.
20:38 Enphase, this is a solar stock I have spoken about before. It sells solar microinverters and battery storage systems to consumers. The consumer solar side of the business has been in something of a depression for the past few years as is evident from Enphase's stock price, which has declined from $335 at the end of 2022 to its current 33.
21:01 Every quarter, investors hope that the business has bottomed and that revenue growth will resume. They were disappointed again. Earnings per share was 47 cents versus 68, a decline of 31%. The company guided second quarter revenue to 280 to 310 million, which is in line with expectations, but provides no sign that business is improving.
21:25 The stock lacks a thesis and without one, it's hard to see why the stock will move up. Wednesday night was a big night. Google, Microsoft, Amazon, and Meta all reported. On Thursday, Google was up 10%, Amazon was up 1%, Microsoft was down 4%, and Meta was down 8 and 1/2%. Here's why. Google, just a really powerful quarter.
21:49 Google's total revenue was 94.7 billion. I'm going to say that again. For the quarter, Google's total revenue was 94.7 billion versus 91.6 billion expected. Google's cloud computing revenue of 20 billion versus 18 billion expected, so a meaningful acceleration in growth. And that's all you really need to know. Microsoft, revenue was 54.5 billion versus 53.8 billion expected. That's good. Earnings per share was 427 versus 405 expected and versus 346 last year, which equates to a very impressive 23% growth, also good. And most importantly, its cloud computing business, Azure, saw 39% revenue growth versus 38% expected. And the company gave strong guidance on the call.
22:44 So, why was the stock down? Well, the 39% Azure revenue growth was only 1% better than expected, and I think some investors were looking for more. On such data, stocks move. Amazon posted a nice beat on earnings per share of 278 versus $1.63 expected. Revenue of 181.5 billion exceeded the estimate of 177.3 billion.
23:11 Most importantly, Amazon Web Services Cloud unit revenue rose 28% versus last year. That is better than last quarter's 24% and better than the 26% estimate. On the call, the CEO said that the company now has over 225 billion in revenue commitments for training AWS's AI chip. And that news really excited investors and the stock moved from being down after hours to up 1% on Thursday.
23:41 Meta, nothing wrong with the quarter. The company beat on most metrics. That was not the issue. CapEx was the issue. Meta raised its 2026 CapEx outlook to 135 billion from 125 billion. And investors, I guess, have grown tired of Meta continuously upping its AI CapEx budget. Meta's problem is that even at 135 billion, it is being outspent by Google, Microsoft, and Amazon.
24:11 Main takeaway from the results of these big four, there is no slowdown in AI CapEx on the horizon. AI CapEx is what is driving GDP and a strong GDP drives the stock market. Moving on, Eli Lilly, I also have owned this stock for years. And there is no question about it, Lilly has won the diet drug wars. Lilly issued a blowout, a blowout quarter.
24:36 Earnings per share of 855 versus 666 expected and versus 334 last year. Wow. Revenue was 19.8 billion versus 17.6 billion expected. Lilly raised revenue and EPS guidance for the year. Let's move on to two industrial names. The industrial sector has become bifurcated. Companies that are somehow AI related are doing well. Everything else is somewhat lagging.
25:02 Last week we focused on GEV and its gas turbine story. This week, let's look at Quanta and Caterpillar. First, Quanta. Full disclosure, I've owned the stock for years as well. It's the company that utilities use for construction and maintenance. It reported another great quarter. Earnings per share was 268 versus $1.78 last year and versus the estimate of only 208. So, quite a big beat. And revenue of 7.87 billion was up 26% versus last year and better than the estimate of 7 billion. Powerful numbers because Quanta is a big beneficiary of the AI data construction boom, which requires more electricity from utilities. Caterpillar. Now, you might not think that Caterpillar is an AI related story, but it is.
25:51 All that data center construction requires equipment from companies like Cat. And Cat posted earnings per share of 554 versus 425 last year and versus the 463 estimate. So, a very nice beat. And revenue of 17.4 billion was up 22% and beat the estimate by more than a billion. Most importantly, sales grew 38% in the construction industries unit, the division most related to AI CapEx.
26:18 And finally, Apple reported Thursday night. It was a good quarter, but not a great quarter. Earnings per share was 201 versus $1.65 last year, 22% growth, and a beat versus expectations. Apple reported total revenue growth of 17%, which was also a beat. The only negative, and it's not a small one, is that sales for iPhone missed estimates for the second time in three quarters.
26:44 This last Monday, we hosted an interview with Chris Edson, global head of originations at Apollo Global Management. The controversy surrounding private credit continues to dominate headlines, and Chris has a front-row seat as to what is really going on in the private credit private equity sector and how Apollo is navigating these waters.
27:05 It's a great interview and I think you will learn a lot, so check it out. This coming Monday, we will post an interview with Chris Faron, head strategist at Strategas, and Todd Sohn, head strategist at Strategas. We discuss the recent rally in the market, what's working and what is not, and any and all pitfalls to avoid. So, please tune in.
27:23 Be sure to check out our website realeismanplaybook.com. If you're enjoying these weekly wraps and our podcast, we kindly ask that you support the channel by subscribing to our YouTube channel and to our audio channels, The Real Eisman Playbook. Subscribing is the best way to help us expand this community to more like-minded individuals such as yourselves, and we greatly appreciate your support. And that's the wrap.
27:50 This podcast is for informational purposes only and does not constitute investment advice. The host and guests may hold positions in stocks discussed. Opinions expressed are their own and not recommendations. Please do your own due diligence and consult a licensed financial advisor before making any investment decisions.