Wall Street finished the first week of the fourth quarter with a powerful Friday rally, but beneath the headline numbers investors continue to face one of the most unusual markets of the past several years.

On Friday, October 2, the Dow Jones Industrial Average closed at 51,176.96, gaining 250.40 points, or 0.49%, for the session. The S&P 500 closed at 7,722.72, rising 56.27 points, or 0.73%. The technology-heavy Nasdaq Composite closed at 27,190.86, jumping 319.27 points, or 1.19%.

Those numbers are important because Friday's rally changed the tone of what had been a more difficult week.

Despite Friday's strong finish, the Dow declined approximately 1.3% for the week, while the S&P 500 slipped roughly 0.3%. The Nasdaq managed to gain approximately 0.5%, continuing the extraordinary strength we have seen in technology and artificial-intelligence-related companies.

The catalyst Friday was the September employment report.

The U.S. economy added only 29,000 jobs in September, considerably below expectations. Normally, weak employment growth would not necessarily be something investors celebrate. But the market is currently obsessed with one question: What will the Federal Reserve do with interest rates?

The weaker employment number reduced expectations that the Fed would need to raise rates again immediately. That sent investors back toward growth stocks, technology companies and other investments that tend to benefit when expectations for future interest rates decline.

That explains why the Nasdaq dramatically outperformed the Dow on Friday.

The market continues to walk a very narrow path. Investors want the economy to remain strong enough to support corporate earnings, but they do not want economic growth or inflation to become so strong that the Federal Reserve feels compelled to tighten monetary policy further.

Interest rates remain one of the biggest risks facing stocks.

Treasury yields moved sharply higher during the third quarter as investors adjusted to the possibility that inflation could remain above the Federal Reserve's desired level for longer than previously anticipated. Higher oil prices have added another inflationary complication.

September's inflation data offered some relief. The Personal Consumption Expenditures Price Index increased 3.4% from a year earlier, while second-quarter GDP was revised to show annualized economic growth of approximately 2.2%.

That combination illustrates the Fed's problem.

The economy is still growing, inflation remains above target, and yet employment data is beginning to soften.

If inflation stays elevated while employment weakens, the Federal Reserve's job becomes considerably more complicated. Raising rates could slow the economy further, while lowering rates too quickly could allow inflation to accelerate again.

For long-term investors, this is another reminder that predicting every Federal Reserve decision is probably not the best investment strategy.

Owning companies with strong balance sheets, growing earnings, durable competitive advantages and the ability to generate substantial free cash flow gives investors a better chance of navigating multiple economic environments.

One of the most interesting developments during September was the enormous difference between the headline indexes and the average stock.

The S&P 500 declined only modestly during September, while the Nasdaq actually gained about 2%. But those headline numbers disguised considerable weakness underneath the surface. Roughly 78% of S&P 500 companies declined during September, while technology and communication-services companies accounted for much of the strength keeping the major indexes elevated.

That is a major divergence.

The technology sector gained approximately 5.5% during September, while only technology and communication services among the 11 major S&P sectors finished the month higher.

Investors were essentially separating companies into two categories: businesses they believe will benefit materially from artificial intelligence and companies facing higher borrowing costs, higher energy expenses and slower economic growth.

That distinction helps explain why the Nasdaq continues to hold up so well even while many individual stocks struggle.

There were still some spectacular individual winners during the last month.

Intel (INTC) was among the biggest large-cap stories, gaining roughly 38% during September. The move represented a remarkable resurgence in investor interest in a semiconductor company that has spent years attempting to restore its competitive position.

Moderna (MRNA) gained approximately 37% during September, while Bloom Energy (BE) advanced roughly 36%.

Advanced Micro Devices (AMD) climbed approximately 33%, another indication that investors remain extremely interested in companies positioned around AI computing.

Meta Platforms (META) gained approximately 30% during September, making it another major contributor to technology-sector strength.

Skyworks Solutions (SWKS) gained roughly 30%, while Illumina (ILMN) advanced approximately 29%.

And the list continued.

Marvell Technology (MRVL) gained roughly 29%, Hewlett Packard Enterprise (HPE) approximately 22%, Dell Technologies (DELL) around 18%, Datadog (DDOG) roughly 18%, Teradyne (TER) approximately 18%, and Micron Technology (MU) around 13%.

Those gains demonstrate just how much opportunity existed inside an otherwise difficult month.

They also reinforce a theme we have discussed repeatedly in Smart Wealth: the stock market is not really one market.

At any given moment, hundreds of different stories are playing out simultaneously.

Artificial intelligence continues to influence capital spending across corporate America.

Microsoft, Nvidia, Meta, Alphabet, Amazon and other technology giants are spending enormous amounts of money building the computing infrastructure necessary to train and operate increasingly sophisticated AI systems.

That spending is flowing throughout the technology ecosystem—from semiconductors and networking equipment to data centers, cloud computing, power generation and enterprise software.

The result has been an unusually concentrated market.

Companies that can demonstrate tangible AI revenue growth have generally been rewarded, while companies merely promising future AI opportunities are receiving much greater scrutiny.

That distinction is healthy.

Eventually, every major investment trend moves from the excitement stage to the earnings stage. Investors stop asking, "How big could this become?" and begin asking, "How much money are you actually making from it?"

Microsoft is becoming one of the clearest examples of a company beginning to answer that second question.

Several major growth companies helped push the market higher Friday.

Nvidia reached another record as enthusiasm surrounding AI infrastructure remained strong.

Tesla jumped approximately 4.7% after reporting stronger-than-expected third-quarter vehicle deliveries. Tesla delivered more than 486,000 vehicles during the quarter.

Alphabet, Amazon and Microsoft also participated in Friday's technology rally. Alphabet Class C closed at $340.35, Amazon at $251.52 and Microsoft at $517.53.

The continued leadership of mega-cap technology companies explains why investors need to look beyond the Dow when judging the health of the market.

The Dow contains only 30 companies. The S&P 500 provides a much broader picture of large American corporations, while the Nasdaq's heavy exposure to technology and growth companies makes it particularly sensitive to enthusiasm surrounding artificial intelligence.

Right now, those differences matter enormously.

Investors now enter the final three months of 2026 with several competing forces.

Corporate earnings remain important. AI investment remains enormous. Economic growth is still positive. Yet Treasury yields remain historically elevated compared with most of the post-financial-crisis era, inflation remains above the Fed's target, and market breadth has weakened considerably.

Through October 2, the Nasdaq is up approximately 17% year-to-date, the S&P 500 approximately 12.8%, and the Dow approximately 6.5%.

That is a strong year by almost any historical standard.

But those returns should not make investors complacent.

September demonstrated how quickly leadership can narrow. Nearly four out of every five S&P 500 stocks declined during the month even though the headline indexes remained relatively resilient.

That is why diversification and valuation still matter.

We continue to believe one of the biggest mistakes investors can make is allowing short-term market predictions to overwhelm long-term investment decisions.

Nobody knows exactly what the Federal Reserve will do six months from now.

Nobody knows where the 10-year Treasury yield will finish 2027.

Nobody knows which geopolitical headline will dominate television next month.

And nobody knows exactly where the Dow, S&P 500 or Nasdaq will finish next year.

But we can study businesses.

We can look for companies with strong balance sheets, expanding markets, competitive advantages, talented management teams and the ability to generate increasing amounts of cash.

That is a much more productive exercise than trying to predict every market correction.

The portfolios we will discuss later in this newsletter demonstrate that principle.

Some of our biggest winners did not become big winners in a few weeks. They became big winners because we owned them long enough for the businesses—and eventually their stock prices—to compound.

That does not mean investors should ignore valuation. A wonderful company purchased at an irrational price can still produce disappointing returns. It also does not mean investors should refuse to sell when an investment thesis changes.

But short-term volatility alone is not an investment thesis.

Our philosophy remains straightforward: we would rather own outstanding businesses for many years than attempt to predict every short-term market move.

There will always be another employment report, another Federal Reserve meeting, another inflation report and another geopolitical headline.

Great companies, however, can continue increasing revenue, earnings and free cash flow through multiple economic cycles.

And that brings us directly to this week's Stock Spotlight—one of the most important technology companies in the world and one of the greatest long-term winners in both Chris's and Frankie's portfolios.

It is one thing for a small company with $100 million of annual revenue to grow 20%.

It is entirely different for a global technology giant generating tens of billions of dollars every quarter to continue producing double-digit growth.

Azure remains at the center of that story.

Microsoft reported Azure growth of approximately 43%, while Azure's annual revenue has surpassed the $100 billion level.

That is extraordinary.

Azure has evolved from an ambitious challenger to Amazon Web Services into one of Microsoft's most important businesses.

Artificial intelligence could make it even more valuable.

Companies building AI applications require enormous computing capacity. They need GPUs, networking equipment, storage, databases, cybersecurity and software tools.

Microsoft can provide virtually the entire stack.

That creates an opportunity not simply to sell AI software, but to become part of the underlying infrastructure on which thousands of other AI businesses operate.

Microsoft possesses another enormous AI advantage that is sometimes overlooked:

distribution.

Hundreds of millions of people already interact with Microsoft's products.

Businesses run Windows.

Employees use Microsoft 365.

Companies communicate through Teams.

Developers use GitHub.

Enterprises operate workloads through Azure.

That means Microsoft does not need to build an entirely new customer base to monetize artificial intelligence.

It can insert AI functionality directly into products customers already use.

That is the importance of Copilot.

Imagine an employee using Microsoft Word who can instantly summarize documents.

Imagine an executive asking Excel to analyze financial information conversationally.

Imagine a salesperson asking Copilot to summarize meetings, prepare follow-up emails and analyze customer information.

Imagine software developers using GitHub Copilot to write and debug code dramatically faster.

If those tools save employees meaningful amounts of time, businesses may be willing to pay substantially more for Microsoft subscriptions.

That could create another high-margin recurring revenue stream across Microsoft's enormous enterprise customer base.

One reason Chris and Frankie continue viewing Microsoft as a core holding rather than simply an AI trade is that Microsoft is not dependent on a single product.

The company has Azure, Microsoft 365, Windows, GitHub, LinkedIn, cybersecurity, enterprise software, gaming and artificial intelligence.

Few companies in history have possessed that combination of technology, distribution and financial resources.

Consider what a competitor attempting to recreate Microsoft would have to build.

It would need a global cloud-computing infrastructure.

It would need enterprise relationships with corporations around the world.

It would need productivity software used by hundreds of millions of people.

It would need a developer ecosystem.

It would need cybersecurity products.

It would need data centers.

It would need billions of dollars available for research and development.

And then it would need customers willing to abandon Microsoft.

That is a formidable competitive moat.

This week's portfolio review provides perhaps the best argument for long-term investing that we could possibly write.

Chris's Morgan Stanley Microsoft investment is now up 1,012.70%.

That did not happen because Chris perfectly predicted Microsoft's stock price every quarter.

It happened because he owned a great business and allowed the investment to compound.

There were plenty of opportunities to sell Microsoft along the way.

The stock doubled.

It continued higher.

There were market corrections.

There were recessions.

There were interest-rate scares.

There were regulatory concerns.

There were technology transitions.

And yet the business kept growing.

Selling simply because Microsoft had already appreciated would have meant giving up much of the eventual gain.

That does not mean Microsoft can repeat the last decade's performance from today's enormous valuation.

But it demonstrates something incredibly important:

A stock going up is not automatically a reason to sell it.

Frankie's Microsoft investment tells a similar story.

His position is now ahead 197.57%.

For a young investor, that is particularly instructive.

Frankie has something incredibly valuable on his side:

time.

Young investors sometimes believe they need to find obscure stocks capable of rising 1,000% overnight.

They don't.

Owning exceptional businesses while allowing earnings and cash flow to compound for decades can create tremendous wealth.

Microsoft is already enormous, but cloud computing and artificial intelligence give the company potential avenues for continued expansion.

The question is not whether Microsoft can become another Microsoft.

The question is whether Microsoft can continue becoming a larger and more profitable version of itself.

So far, the evidence remains compelling.

After such a dramatic rally, investors also need to recognize the risks.

Microsoft is spending enormous amounts of capital on AI infrastructure.

Data centers are expensive.

GPUs are expensive.

Networking equipment is expensive.

Electricity is expensive.

Microsoft ultimately has to generate sufficient returns on those investments.

Competition is another major risk.

Amazon Web Services remains formidable.

Google is investing aggressively in AI infrastructure and Gemini.

Meta is spending enormous amounts on artificial intelligence.

Nvidia continues expanding beyond chips into software and complete computing platforms.

There is also valuation risk.

A great company can still become expensive.

Microsoft moving from roughly $394 when we highlighted it in July to more than $517 today means investors are paying considerably more for the same company.

That does not necessarily mean Microsoft is overvalued.

It means expectations are higher.

And when expectations are high, even excellent results can occasionally disappoint investors.

Wall Street sentiment toward Microsoft remains overwhelmingly favorable, with the broad analyst consensus centered around Buy/Strong Buy territory.

That does not guarantee the stock will rise.

Analysts can be wrong.

Price targets change constantly.

And investors should never buy a stock simply because Wall Street analysts recommend it.

But the broad optimism reflects something important: Microsoft's combination of cloud computing, enterprise software, recurring revenue and AI exposure gives it one of the strongest strategic positions in technology.

Chris views Microsoft as one of the highest-quality businesses in the world.

The combination of Azure, Microsoft 365, enterprise software, cybersecurity, GitHub and artificial intelligence gives Microsoft multiple durable growth engines rather than forcing the investment thesis to depend on a single product.

More importantly, Microsoft's recurring revenue, enormous installed customer base, exceptional cash generation and ability to invest tens of billions of dollars into future technologies create advantages very few companies can reproduce.

For Chris, Microsoft remains the type of company worth owning through market cycles rather than attempting to trade around every short-term fluctuation.

Frankie's Microsoft investment demonstrates one of the greatest advantages a young investor possesses: a long investment horizon.

Microsoft gives Frankie exposure to cloud computing, enterprise software, cybersecurity and artificial intelligence inside a single highly profitable company.

Rather than attempting to predict which small AI startup will eventually dominate, Microsoft provides exposure to the infrastructure and software being used throughout the AI economy.

And because Frankie has decades ahead of him as an investor, the ability to allow successful companies to compound could ultimately prove far more important than predicting next month's stock price.

At $517.53, Microsoft is clearly more expensive than it was when we highlighted the company in July.

After an approximately 31% advance since July 17, expectations have increased substantially.

Nevertheless, Chris continues to rate Microsoft a BUY for long-term investors because of the company's financial strength, Azure's growth, recurring enterprise revenue, extraordinary distribution and potentially enormous artificial-intelligence opportunity.

For existing shareholders like Chris and Frankie, the thesis remains centered on allowing a great company to compound.

Microsoft's recent rally is a perfect example of why we are reluctant to sell outstanding businesses simply because they have already gone up.

Chris is now sitting on a gain exceeding 1,000%.

Frankie is approaching 200%.

Neither return would have been possible without patience.

Sometimes the most difficult thing an investor can do is nothing.

And sometimes the biggest mistake an investor can make is selling a winner too early.

Closing Price: $251.52 | Chris's Gain: +121.39% | Average Analyst Rating: Strong Buy | Chris's Rating: Strong Buy

Chris also owns Amazon in Fidelity, where this older position has appreciated 121.39%. The thesis remains AWS, advertising, logistics, e-commerce and AI infrastructure, and the much larger gain in this account illustrates how entry price and holding period can dramatically change the return from owning the exact same company.

Closing Price: $302.78 | Chris's Gain: +81.65% | Average Analyst Rating: Hold | Chris's Rating: Buy

American Express operates a premium payments network and card business with an affluent customer base. Chris owns American Express because its closed-loop network, brand and high-spending customers create a differentiated financial-services franchise. The company also benefits over time as consumer and business spending increases.

Closing Price: $31.07 | Chris's Gain: +108.33% | Average Analyst Rating: Hold | Chris's Rating: Hold

Kinder Morgan owns and operates a massive network of natural-gas pipelines and energy infrastructure across North America. Chris owns KMI because natural gas remains crucial for power generation, and rising electricity demand could make pipeline infrastructure increasingly valuable. With a gain exceeding 108%, this holding has already delivered a substantial return while adding energy exposure to the portfolio.

Closing Price: $45.92 | Chris's Gain: -8.97% | Average Analyst Rating: Hold | Chris's Rating: Hold

Verizon operates one of America's largest wireless telecommunications networks. Chris owns Verizon primarily for the durability of wireless demand and the recurring cash flows associated with its enormous subscriber base. The position is down 8.97%, and slower growth means Chris views it differently from the portfolio's major technology growth holdings.

Closing Price: $164.01 | Chris's Gain: +95.46% | Average Analyst Rating: Buy | Chris's Rating: Buy

Exxon Mobil is one of the world's largest integrated energy companies, spanning oil and natural-gas production, refining, chemicals and other energy operations. Chris owns Exxon because hydrocarbons remain essential to the global economy even as renewable energy capacity expands. The stock's 95.46% gain has also provided strong diversification from the technology companies that dominate other parts of his portfolio.

Closing Price: $11.04 | Chris's Gain: +0.63% | Average Analyst Rating: Buy | Chris's Rating: Buy

LightPath Technologies develops optical and infrared technologies used across industrial, defense and other advanced applications. Chris views LPTH as a much more speculative investment than Microsoft, Alphabet or Amazon, but he believes specialized optical technologies could create substantial growth opportunities. With the position approximately flat at +0.63%, this remains a developing investment thesis rather than a proven long-term winner.

Closing Price: $370.59 | Chris's Gain: +16.53% | Average Analyst Rating: Hold | Chris's Rating: Buy

Tesla is an electric-vehicle and energy company increasingly focused on autonomy, robotics and artificial intelligence. Chris owns Tesla because he believes the company's long-term opportunity extends beyond automobile manufacturing into autonomous driving, energy storage and robotics. Those opportunities carry substantial execution and valuation risk, making Tesla one of the portfolio's higher-volatility investments.

Closing Price: $333.69 | Chris's Gain: +198.88% | Average Analyst Rating: Buy | Chris's Rating: Hold

Chris's older Apple position has now appreciated an impressive 198.88%, substantially more than his newer Apple position in the SIMPLE IRA. The investment remains based on Apple's ecosystem, extraordinary brand loyalty, services revenue and ability to monetize its enormous installed customer base.

Closing Price: $233.95 | Chris's Gain: +136.95% | Average Analyst Rating: Strong Buy | Chris's Rating: Buy

Nvidia designs the GPUs and accelerated-computing platforms at the center of the global artificial-intelligence infrastructure boom. Chris owns Nvidia because its combination of leading hardware, CUDA software and a broad developer ecosystem has created one of technology's strongest competitive positions. Even after a 136.95% gain, AI computing remains a massive long-term opportunity, although expectations embedded in the stock are clearly much higher today.

Closing Price: $158.96 | Chris's Gain: +17.74% | Chris's Rating: Hold

SPCX is carried in Chris's Fidelity portfolio as a publicly traded security, and the position is currently ahead 17.74%. Because conventional Wall Street consensus coverage for this security is not as broadly available as it is for large-cap names such as Microsoft or Nvidia, we are not assigning a potentially misleading consensus analyst rating.

Closing Price: $333.69 | Chris's Gain: +5.95% | Average Analyst Rating: Buy | Chris's Rating: Hold

This newer Apple position is up 5.95%, compared with the substantially larger gains in Chris's older Apple holdings. Chris continues holding Apple because of its ecosystem, services business, brand strength and enormous installed base, while recognizing that valuation and AI execution will be important to future returns.

Closing Price: $920.65 | Chris's Gain: -4.98% | Average Analyst Rating: Buy | Chris's Rating: Buy

Costco operates a membership-based warehouse model built around customer loyalty, tremendous purchasing scale and extremely high membership renewal rates. Chris owns Costco because its recurring membership economics and customer loyalty make it one of the strongest retail franchises in America. The position is down 4.98%, but Chris's thesis is based on the business rather than a short-term move in the stock.

Closing Price: $112.20 | Chris's Gain: +8.54% | Average Analyst Rating: Buy | Chris's Rating: Buy

Cisco provides networking, security and infrastructure technology used throughout enterprise computing and data centers. Chris owns Cisco because rising network traffic and AI infrastructure spending require increasingly sophisticated networking equipment. The company's recurring software and security businesses also make Cisco more diversified than its traditional hardware reputation suggests.

Closing Price: $309.09 | Chris's Gain: -4.01% | Average Analyst Rating: Buy | Chris's Rating: Buy

Chris's newer GE Aerospace position is down 4.01%, in sharp contrast with the 211% gain in his older Morgan Stanley position. That comparison demonstrates why the same company can show dramatically different portfolio returns depending on purchase date, while the underlying investment thesis—aircraft engines, aftermarket service revenue and long-term aviation demand—remains the same.

Closing Price: $85.65 | Chris's Gain: +8.72% | Average Analyst Rating: Buy | Chris's Rating: Buy

Coca-Cola owns one of the world's most powerful beverage portfolios and distributes its products virtually everywhere. Chris owns Coca-Cola because its brands, global distribution, pricing power and recurring consumer demand make it a durable defensive holding. It provides a useful counterbalance to the portfolio's faster-growing technology investments.

Closing Price: $347.49 | Chris's Gain: +25.60% | Average Analyst Rating: Buy | Chris's Rating: Buy

Lam Research manufactures semiconductor fabrication equipment used to produce advanced memory and logic chips. Chris owns Lam because AI requires enormous amounts of semiconductor manufacturing capacity, and equipment suppliers can benefit regardless of which individual chip designer ultimately captures the most market share. The position is already ahead 25.60%.

Closing Price: $552.26 | Chris's Gain: +2.41% | Average Analyst Rating: Strong Buy | Chris's Rating: Buy

Mastercard operates one of the world's dominant electronic-payment networks. Chris owns Mastercard because the long-term movement from cash toward digital payments remains a powerful global trend, while Mastercard earns economics from enormous transaction volumes without taking the same credit risk as a traditional lender. This is a classic high-quality compounder that Chris is comfortable owning for years.

Closing Price: $144.30 | Chris's Gain: +18.55% | Average Analyst Rating: Buy | Chris's Rating: Buy

Merck is a global pharmaceutical company with major businesses in oncology, vaccines and other therapeutic areas. Chris owns Merck to provide healthcare diversification and exposure to a company capable of generating substantial cash flow from patented medicines. The 18.55% gain has been a solid contribution from outside the technology sector.

Closing Price: $144.91 | Chris's Gain: -2.99% | Average Analyst Rating: Buy | Chris's Rating: Hold

This newer P&G position is down 2.99%. Chris continues owning the company because household staples, global brands and recurring consumer demand can provide stability when more economically sensitive or technology-oriented holdings become volatile.

Closing Price: $188.75 | Chris's Gain: +31.11% | Average Analyst Rating: Hold | Chris's Rating: Buy

Palantir develops sophisticated data analytics and artificial-intelligence software used by governments and commercial customers. Chris owns Palantir because its software can help organizations turn enormous datasets into actionable decisions, and its AI platform has expanded the potential commercial opportunity. The position has already gained 31.11%, but Palantir's premium valuation means execution will remain critical.

Closing Price: $360.66 | Chris's Gain: +7.87% | Average Analyst Rating: Strong Buy | Chris's Rating: Buy

Visa operates one of the world's largest electronic-payment networks. Chris owns Visa because global commerce continues migrating from cash to electronic payments, allowing Visa to participate in enormous transaction volumes without functioning like a traditional bank. Its network effects, margins and international opportunity make it another long-term compounder in the portfolio.

Closing Price: $988.70 | Trip's Gain: +881.86% | Average Analyst Rating: Buy | Smart Wealth Rating: Buy

GE Vernova is Trip's spectacular long-term winner and remains one of the defining investments in his portfolio. At +881.86%, the position demonstrates what a single extraordinary winner can do inside a relatively small portfolio.

The thesis remains electricity. AI data centers, reshoring of manufacturing, electrification and economic growth all require enormous new investments in generation and transmission infrastructure, positioning GE Vernova directly in front of one of the decade's most important capital-spending trends.

Closing Price: $920.65 | Trip's Gain: +99.74% | Average Analyst Rating: Buy | Smart Wealth Rating: Buy

Trip has nearly doubled his money in Costco, with the position now ahead 99.74%. Costco's membership model, renewal rates, customer loyalty and purchasing scale have made it one of America's most durable retail businesses.

Costco is particularly interesting inside Trip's portfolio because it provides diversification from semiconductor and AI-related holdings. It proves that investors do not need to own speculative technology companies to produce outstanding long-term returns.

Closing Price: $119.33 | Trip's Gain: -6.66% | Average Analyst Rating: Hold | Smart Wealth Rating: Hold

Intel remains Trip's turnaround investment and is currently down 6.66%. The company is attempting to restore manufacturing leadership while simultaneously competing in processors, AI computing and semiconductor foundry services.

Intel offers significant potential if the turnaround succeeds, but it also carries considerably greater execution risk than an established compounder such as Costco. This remains a position where future operating results matter far more than short-term stock movements.

Closing Price: $1,074.89 | Trip's Gain: +24.53% | Average Analyst Rating: Strong Buy | Smart Wealth Rating: Buy

Micron has become another strong winner for Trip, now ahead 24.53%. The company manufactures memory and storage products, including the high-bandwidth memory increasingly required by advanced AI accelerators.

The important change in Micron's story is that AI is dramatically increasing the amount and sophistication of memory required in data centers. If that demand remains strong, Micron could continue benefiting from an unusually favorable memory environment.

Frankie's portfolio remains the most growth-oriented of the three. It includes several highly successful investments alongside a few positions currently trading below his cost basis.

Navitas Semiconductor — NVTS

Closing Price: $12.40 | Frankie's Gain: +66.66% | Average Analyst Rating: Buy | Smart Wealth Rating: Buy

Navitas develops next-generation power semiconductors using gallium nitride and silicon carbide technologies. Frankie owns Navitas because advanced power semiconductors can improve efficiency across data centers, electric vehicles, consumer electronics and industrial applications.

After once producing an even larger gain for Frankie, NVTS remains ahead a substantial 66.66%. This is a smaller, higher-risk semiconductor investment where execution will matter tremendously.

Closing Price: $242.81 | Frankie's Gain: +186.43% | Average Analyst Rating: Buy | Smart Wealth Rating: Buy

Nebius has become one of Frankie's strongest newer investments, with the position up an extraordinary 186.43%. The company is building AI infrastructure and cloud-computing capabilities designed for the rapidly expanding demand for accelerated computing.

The investment gives Frankie direct exposure to the infrastructure required to train and operate artificial-intelligence models. The huge appreciation also means expectations are considerably higher today, making future execution increasingly important.

Closing Price: $988.70 | Frankie's Gain: +881.86% | Average Analyst Rating: Buy | Smart Wealth Rating: Buy

Like Trip, Frankie owns GE Vernova and is up an incredible 881.86%.

GEV demonstrates one of our favorite Smart Wealth principles: sometimes the best decision after finding a great investment is simply giving it time. AI data centers and electrification are creating enormous demand for electricity, while GE Vernova participates across generation and grid infrastructure.

Closing Price: $920.65 | Frankie's Gain: +99.06% | Average Analyst Rating: Buy | Smart Wealth Rating: Buy

Frankie's Costco position is now up 99.06%, putting him extremely close to doubling his original investment. Costco's recurring membership revenue, customer loyalty, purchasing power and disciplined operating model have made it one of the world's premier retailers.

Costco also gives Frankie's portfolio valuable diversification away from AI and emerging technology. A portfolio can benefit enormously from combining exciting growth companies with businesses that simply execute extremely well year after year.

Closing Price: $134.38 | Frankie's Gain: +47.49% | Average Analyst Rating: Strong Buy | Smart Wealth Rating: Buy

ServiceNow provides cloud-based workflow and enterprise automation software and is increasingly incorporating generative AI into its platform. Frankie owns ServiceNow because large organizations continually seek ways to automate repetitive processes and make employees more productive.

The position is now up 47.49%, significantly higher than when we first highlighted ServiceNow earlier this year. The company remains one of the portfolio's higher-quality enterprise-software holdings.

Closing Price: $394.60 | Frankie's Gain: -3.89% | Average Analyst Rating: Buy | Smart Wealth Rating: Buy

Corpay provides corporate payments, expense management and specialized payment solutions to businesses. Frankie owns Corpay because businesses continue moving financial processes away from manual systems toward automated digital platforms.

The position is currently down 3.89%, but a modest decline does not determine whether the underlying investment thesis is working. Corpay's ability to grow payments volume, revenue and free cash flow will ultimately determine the success of the investment.

Closing Price: $5.67 | Frankie's Gain: +45.38% | Average Analyst Rating: Buy | Smart Wealth Rating: Buy

Aurora is developing autonomous-driving technology with an initial emphasis on self-driving trucking. Frankie owns Aurora because successful autonomous trucking could reduce transportation costs while addressing driver shortages and increasing utilization of expensive trucking assets.

Frankie is currently up 45.38%, although Aurora remains one of the portfolio's more speculative holdings. Autonomous driving has enormous potential, but commercialization, regulation and capital requirements create meaningful risk.

Closing Price: $268.22 | Frankie's Gain: -15.27% | Average Analyst Rating: Buy | Smart Wealth Rating: Hold

AppLovin operates advertising technology that uses sophisticated algorithms and AI to help businesses acquire and monetize users. Frankie owns AppLovin because AI-driven advertising technology can create substantial value when it improves advertisers' return on spending.

The position is currently down 15.27%, making it Frankie's largest percentage decliner among the positions shown this week. The appropriate focus now is not the purchase price but whether AppLovin's operating results justify the investment thesis from today's valuation.

Closing Price: $144.03 | Frankie's Gain: +5.72% | Average Analyst Rating: Buy | Smart Wealth Rating: Buy

PTC develops industrial software used for computer-aided design, product lifecycle management and digital manufacturing. Frankie owns PTC because manufacturers are increasingly digitizing the way products are designed, built, monitored and serviced.

The position is ahead 5.72%. PTC provides Frankie with exposure to industrial digitization rather than the consumer-facing AI businesses that receive most of the headlines.

Closing Price: $517.53 | Frankie's Gain: +197.57% | Average Analyst Rating: Strong Buy | Smart Wealth Rating: Buy

Microsoft is one of Frankie's greatest long-term investments, with the position now ahead an extraordinary 197.57%.

As discussed in this week's Stock Spotlight, Microsoft combines Azure, Microsoft 365, GitHub, cybersecurity, enterprise software and Copilot into one of the most powerful technology ecosystems ever assembled. Frankie's result demonstrates why young investors can benefit tremendously from identifying exceptional companies early and allowing time and compounding to do the heavy lifting.

There is a fascinating lesson inside these three portfolios this week.

Chris is up more than 1,000% in Microsoft and more than 860% in GE Vernova. Trip is up nearly 882% in GE Vernova, almost 100% in Costco, and more than 24% in Micron. Frankie is up approximately 882% in GE Vernova, 197% in Microsoft, 186% in Nebius, nearly 100% in Costco, 66% in Navitas and 47% in ServiceNow.

Yet all three portfolios also contain losing positions.

That is investing.

A successful investor does not need every investment to be profitable at every moment. More importantly, a portfolio does not require every investment to become a ten-bagger.

The mathematics of investing are asymmetric. A stock can decline only 100%, but a successful investment can rise 200%, 500%, 1,000% or considerably more. That is one reason we spend so much time thinking about whether we are selling successful businesses too early.

Microsoft is perhaps the best example this week.

Chris is now up more than 1,000% on his Morgan Stanley Microsoft investment. Frankie is approaching a 200% gain in his Microsoft position. Had either investor automatically sold after making 20%, 50% or even 100%, much of that additional wealth creation would never have occurred.

GE Vernova tells a similar story. Both Trip and Frankie are sitting on gains approaching 900%, while Chris's position is up more than 860%.

None of that means a winning stock should automatically be held forever. Valuation changes. Competition changes. Management changes. Technology changes. Sometimes the investment thesis itself changes.

But price appreciation alone does not make a great company a bad investment.

As we enter the fourth quarter of 2026, we will continue watching the same major themes that have shaped our portfolios throughout the year: artificial intelligence, semiconductor demand, cloud computing, electricity generation, data-center construction, digital payments, industrial automation and the continuing digitization of the global economy.

We will also continue emphasizing diversification.

Some of the most exciting opportunities today are in AI, but Chris also owns Coca-Cola, Procter & Gamble, Exxon Mobil, Merck and other businesses far removed from the AI boom. Trip owns Costco alongside Micron and GE Vernova. Frankie owns Costco alongside emerging companies such as Navitas, Aurora and Nebius.

Different businesses can serve different purposes.

Ultimately, Smart Wealth is not about finding the hottest stock of the week. It is about developing the discipline to save money, acquire productive assets, understand what you own and give great investments enough time to compound.

That philosophy applies just as much to real estate as it does to stocks.

Buy quality assets. Understand why you own them. Be patient. Keep learning. Let compounding work.

We'll be back next week with another edition of the Smart Wealth Newsletter.

— Chris, Trip & Frankie

The Smart Wealth Newsletter is provided for educational and informational purposes only. Nothing contained in this newsletter should be interpreted as individualized investment, financial, tax, accounting or legal advice, or as a recommendation to buy, sell or hold any particular security, investment or real estate asset.

Chris, Trip and Frankie may own securities discussed in this newsletter, including securities specifically identified as holdings in their portfolios. Their investment objectives, purchase prices, time horizons, financial circumstances and tolerance for risk may be very different from those of readers.

References to analyst ratings represent third-party opinions and can differ among research providers and change at any time. Smart Wealth ratings represent newsletter commentary and should not be interpreted as personalized investment recommendations. Analyst price targets, forecasts and ratings are estimates, not guarantees of future performance.

Past performance does not guarantee future results. A stock that has appreciated substantially can decline significantly, and investors can lose some or all of the money invested in an individual security. Percentage gains and losses discussed in this newsletter reflect the specific cost basis of the portfolios shown and should not be interpreted as returns that another investor could have achieved.

Higher-growth companies, emerging technologies, small-cap stocks, artificial-intelligence investments and concentrated portfolios may involve substantial volatility and risk. Readers should conduct their own research and consider consulting qualified financial, tax and legal professionals before making investment decisions.

Invest intelligently, think long term, and never stop learning.