Why Sozzi just added McDonald's to the 'Wall of Underperformers'

Yahoo Finance Executive Editor Brian Sozzi takes a look at the biggest stories as the trading day kicks off, weighing in on Marvell's (MRVL) investor day, the tech sector's market performance, the latest McDonald's (MCD) frenzy, and more.

Sozzi also sits down with SailPoint (SAIL) CEO and founder Mark McClain for a conversation about concerns surrounding AI safety and agents going rogue.

Just testing my uh grip strength here this morning. This little thing, I'm about 2.5 weeks of doing Sazia Unleashed, and this thing has really helped me out like bigly. Is that the word? You'd be surprised what a $15 grip strength machine will do, but also reading some notes and, you know, I, I really like have start starting the show on things that like amuse me, that make me happy.Because if they make me happy, maybe they'll make you happy. Two things that caught me by storm, I would say this morning. One, Nvidia now pretty much, not pretty much, I should say about has a market cap of $1 trillion more than Apple. $1 trillion more than Apple despite its foldable phone, Nvidia.That lead is, it's almost hard to believe. I would have never thought about 10 years ago this would even be possible, but here we are. Also, something that I never thought would have been possible. This, the iconic Warner Brothers Tower in Burbank, no, it no longer holds water. It's just an iconic thing. Now getting the Skydance Corporation logo put on it after that deal is closed. Management team, Eon cries, David Ellison sending a memo to employees.That might be an iconic symbol, but this is our company now, Peeps, and deal with it. Icon, doesn't hold any water, again, don't, I think it used to hold 100,000 gallons of water or that's what I got online, that's what I pulled this morning. Uh, so interesting to see that.Also interesting to see that this has been a pretty amazing week, you just have to know where to look. This week has shaped up as one where high profile tech stocks have rubber stamped their day with Destiny, more on this, this grip strength. I'm just loving this thing right now.Nvidia has reached a record high, AMD has reached a record high, Taiwan Semiconductor has reached a record high, Microsoft knocking on the door of, you guessed it, another high. If this isn't a classic case of FOMO or fear of missing out, then maybe I need to retire today and start a YouTube show on how to grow the perfect lawn. I love tending to my plush lawn, I should just do that anyway, cause I love doing that.And here's the thing, this isn't just a FOMO moment in time around the AI boom. It has morphed into a FOMO period. You can see it in Wall Street analysts not hiding how they are excited or how excited they are about the AI boom related profit parade raging on. Check this out. I get so many stats. I'm just finding this moment very fascinating. About 40% of the year to date revisions to S&P 500 EPS estimates for this year are attributable to the semis and hardware.Industries new analysis out today from Barclays strategist Vinu Krishna. Zoom out to next year, that would be 2027, and the concentration becomes even more stark. Substantially 75% of the year to date revisions to 2027 S&P 500 estimates come from semis and hardware, a mouthful but important stuff if you are an investor. FOMO is running through tech stocks and analyst models on cloud. Wow, used to be spreadsheets when I did this.What a time to be alive and to make some money in the stock market. Estimates are already going up for next year, we're still in this year. Ching, ching, ching. That's what the street is saying here right now.Where to begin? Cause I got a lot going on here. Uh, I wanna apologize to y'all first, and, uh, I won't do this often, but I'm gonna do it now because I don't talk about Marvel technology enough. I talk about Micron, I talk about Nvidia, I talk about AMD and Lisa Sue and all these folks, but I do not talk about Marvell enough and CEO Greg Murphy, who's been there, I believe, CEO since 2016 and has shaped the modern Marvell technology. And Micron had an investor day yesterday.And frankly, Greg Murphy blew me away.He blew me away on what he had to say about the company's total addressable market. That business is growing really significantly. He raised the total addressable market outlook for Marvell up billions of dollars. The street loved to see that, loved that. But there was more. He also raised the company's outlook for billions of dollars, not just for the balance of it this year, but also next year. Very bullish. And here's what they had to say. Here's what Marvell did raise the outlook on strong AI demand.This year, next year, he even suggested that all this is going to continue until fiscal year 2031. I mean this is a big, big moment for Marvel, and I talk about the demand visibility that AMD has, the demand visibility that Nvidia has, Micron has. Don't discount a company like Marvel. The stock has gone up and to the right all through this year, I believe up over 200%, and it's because of this total adjustable market for its chips are kicking major butt. It's a major chip seller.Into the data infrastructure space, it has business with Google and Amazon, even Microsoft. It is a major player you're still probably not giving enough respect to, and you can see Micron Marvell stock is crushing. Like I mentioned, up and to the right, not yet back to its record high, but this investor day was so impressive. I got about 8 analyst notes in my inbox today before I even got on my train at 4 a.m. The street is pushing estimates up much higher on Marvell. Keep that company top of mind for you because this has been.A bankable name on all things Marville.I'm gonna hit some charts. I think that's what I'm gonna do.First up, weird charge I should say, because I'm always spending a lot of time on X. I'm doing a lot of stuff and.Couple of things caught my eye, and.It's Micron operating income. I remembered. I, I have a lot of charts in my head, I got a lot of things going on. This one, first up, Micron is now journeying more operating income than Amazon and Meta over the trailing 12 months. Back to what I said at the top of the show, I would have never expected this to happen.A decade ago, I mean, Amazon and Beta, Micron more trailing operating income than these iconic companies. But here's the chart, and shout out to my man, uh my team over there or the team over there at Coifin making this one happen. This is an amazing chart, but it goes to show you how far Micron has come and how important its memory chips are in this market, so important that it can pretty much charge whatever the hell it wants.And that's why it's seeing a lot of operating income, and that's why in a few weeks you're probably gonna see a big stock buyback plan from them once the chip ax restrictions live. Fire up the next chart. We're gonna keep it going here. Next chart, tech dominance over EPS growth. This is another good 10 hedge, an old hand on X. I've been following Zero hedge for many years. This is just, and I have a full story on this now on the Al Find's homepage, you can check it out. Uh, it's quite informative because I wrote it.You can check this out. Micron and Nvidia are really going to dominate the earnings growth in the S&P 500 this year, and I wouldn't be surprised if you could see if that continues again if I'm here 3 months from now and we're talking about it for the 4th quarter, we're talking about it next year. Micronon and Nvidia dominating.Earnings growth and then you have meta, you have Alphabet, some of the other big players in the space, but I will call it this too. Look how less important the likes of a Chevron, a Boeing, an Exxon, those old industrial companies, those old economy companies are how less important they are to the S&P 500 earnings growth. Big moment for Micron Nvidia. And number 3, chart Metacapex. Metacapex very interesting here.This isn't new per se, but it's always good to zoom out on a company's financial results, and I would be surprised. I was actually surprised by this. Meta is now spending or on pace to spend 50%.Of their revenue on capital expenditures, of course, Meta, amongst a lot of the other hyperscale companies, spending billions of dollars on all things AI, and this is where it's showing up now in the best possible case for Meta, this actually is around the peak, and then it starts to level off and slow down. That is the magic moment for the likes of Meta once they're earning more revenue.Uh, and the Capex is coming down. That's when the profits really start to flow. That's when the free cash flow story comes back to Emeta and a lot of other hyperscales. That's when the company come out there and show faster earnings growth. Interesting chart, uh, really, clearly, and I think, uh, Finance Jack, shout out to Finance Jack. I follow him on X. Zuck is all in on AI, and that is very much, uh, top of mind, and that backs it up.And now we are, we're back on an old hand. And it's McDonald's. And it's a company that I've blasted pretty much since we've debuted this show. And I'm gonna continue to blast them because they deserve it. There was a story, shout out to the Bloomberg team, uh, talking aboutHow franchisees are balking at spending $800,000 to remodel their McDonald's locations. This is part of the company's $8.5 billion I believe, plan they put out a couple of weeks ago at their investor day in Chicago to remodel their restaurants. And according to the Bloomberg reporting, franchisees are balking because they are concerned, and $800,000. I mean, when you have a McDonald's franchise, you are essentially a small business.Owner, so to ask for, ask these small business owners who spent $800,000 plus to remodel their location at a time where traffic is weak, at a time when it's unclear traffic may turn around, is not exactly going to be met quite well by McDonald's franchisees. So the story that Bloomberg is talking about, and they're right to reporting this because it's something that Guggenheim analyst Gregory Frankfurt brings up too as well.To turn that traffic around at McDonald's, you have to get better restaurants. You have to take the, the technology and the new experience that McDonald's corporate has cooked up, no pun intended, at their Chicago headquarters and get that into the franchise locations. And if that doesn't happen, it's not likely that McDonald's is going to be out there growing traffic. And I was looking at Greg's note before I get to uh the real star performer of this little, this little bit. Uh, he's not expecting the same sort of sales in the US.To turn positive again until next year, and even then, he only sees about a 1.9% same store sales increase. He sees the third quarter negative in terms of US same source sales and the fourth quarter negative too. Those two results are not going to get McDonald's stock working up into the right again, even though it has plunged. And now really, uh, we're at that moment and we're gonna give it, uh, we're gonna go to bear hibernation with a little lime, a little lion. And I, I forgot to do this. I forgot to do this last week.And I'm right that wrong. We're going to put our second member on the Sazi Unleashed Wall of underperformers. And like I said when I unveiled the initial member yesterday in Nike CEO Elliott Hill, I take no great pleasure in this. Uh, it's not something I want to do. I'm a happy, smiley guy. Uh, I don't like this board. I hope it goes away. But the second member on this board, you see Elliott Hill, roll the dice, fire it up, guys. It's McDonald's CEO Chris Kemchinski.So, we now have 2 members of the Sazy wall of underperformers. It is McDonald's CEO Chris Kamzyski. The stock price has gotten crushed this year.It's gotten crushed the past year. It's gotten crushed the past 5 years. It's gotten it underperformed brutally versus the S&P 500 and Dow since Chris got named as CEO in November 2019. And I'm just not putting people on this list for the sake of doing so. I'm going to list out the reasons. There we go. Huge stock price performance, underperformance. Results in the US have hit the skids this year. I just told you that the team at Guggenheim is looking for two more quarters of negative same source sales from this company. That's after a disappointing result in the 2nd quarter. And the last.At least no indication year end will be materially better than the first half of the year financially for McDonald's, and I'm now at the point, I wonder if the first quarter of 2027 will be any better than the 3rd quarter or 4th quarter for McDonald's. So Chris Kupczynski, the second member of the Saziali wall of underperformers, like I said with Elliott Hill, I hope Chris comes off this. I hope McDonald's turns it around. I hope Nike turns it around, but right now these two are the two bros on my wall, and I would say both of them deserve that position because.They haven't been doing a good job.Let's get to a CEO who has been doing a good job.No stranger to my show. That's Mark McLean, Cello CEO and founder, fresh off an investor day. Mark, good to seeyou.