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Market Data Table

Breakfast News: Netflix Needs a New Plot Twist

October 5, 2026

Friday's Markets
S&P 500 7,723 (+0.73%)
Nasdaq 27,191 (+1.19%)
Dow 51,177 (+0.49%)
Bitcoin $84,196 (-0.49%)

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1. Schneider Plugs Into PTC

Chart comparing the market performance of PTC to that of Schneider over the past decade, with Schneider up 394% and PTC up 214%.

A French industrials company wants to create "the industry's most complete Software & AI powerhouse." That's Schneider Electric (OTC: SBGSY), the company that sells the electrical gear that powers artificial intelligence (AI) data centers, factories, and grids. It is now buying the blueprints, having agreed to acquire PTC (NASDAQ: PTC) for $205 per share in cash in a deal valued at $23.7 billion. That's a 42.3% premium to PTC's last closing price. Team Hidden Gems has recommended both PTC and Schneider Electric and has a five-year price prediction of $137.80 for the latter.

Building a recurring, digital flywheel: Schneider already owns AVEVA, whose software helps operate and maintain industrial assets. PTC's software also manages that engineering data. Schneider is trying to own more of the stack and boost the share of high-margin recurring revenue. The deal will lift software and services to an estimated 24% of Schneider's pro forma revenue. It could pause buyback in 2027 and 2028, but that's a sensible price to pay for steadier recurring revenue.
AI spills over into the physical economy: Schneider's move signals a broader industry shift. The line between companies that build AI infrastructure and those that provide the software to run it is blurring. AI spending is creating a second wave of beneficiaries in industrial software, energy management, and automation. While this deal may not close before the third quarter of 2027, it signals where industrial companies see the next leg of growth.

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2. AI Task Force Assembles

Move over, AI. President Donald Trump has created a "Super Intelligence Force," or SIF, led by Director of National Intelligence Jay Clayton, to ensure the U.S. leads in AI. The task force will bring together intelligence, defense, regulators, infrastructure providers, and AI companies. It follows a Sept. 29 executive order telling agencies to replace "artificial intelligence" with "super intelligence." Elon Musk got the memo: SpaceX (NASDAQ: SPCX) will rename its AI unit SpaceXSI, he says.

The tug-of-war we're all watching: Within 120 days, SIF must deliver a report on the technology's risks and opportunities. The companies it will work with aren't all on the same page, though. OpenAI CEO Sam Altman says the world should accept "some bad things happening" in exchange for broad access to AI, while Anthropic has pushed for tougher safeguards.
AI spending could shift: That increasingly interesting debate matters because the eventual rules could decide who captures the next wave of growth. Either way, Washington's move to put intelligence, defense, and industry under one AI umbrella signals AI's growing importance as a strategic asset. Whoever gets paid to make AI increasingly usable, secure, and deployable at scale could take home the money.

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3. The Economy's Next Test

The Nasdaq hit an intraday record on Friday, but investors heading into the week will watch the bond market more than the scoreboard. The S&P 500 slipped 0.27% last week, while the Nasdaq gained 0.45%. Monday's ISM Services report, a survey of service-sector companies, which is also the economy's biggest sector, is the week's first test. A strong reading could ease recession worries, revive rate-hike talks, and support consumer-facing stocks. A weak reading would do the opposite, easing rate pressure but hurting higher-beta stocks, which swing more than the market.

Minutes with a message: Wednesday's Federal Reserve meeting minutes could show how divided policymakers are on the next rate move. Friday's University of Michigan consumer survey will show whether inflation expectations are rising. If consumers' inflation expectations climb, the market could start pricing in a tougher Fed again.
RPM's cost-squeeze test: In a thin earnings week, RPM International (NYSE: RPM) reports fiscal first-quarter earnings Tuesday. RPM is recommended in Dividend Investor and in Stock Advisor by Team Rule Breakers. Here's what to watch: Can price increases offset raw material inflation? Higher inflation or slower housing turnover delays home improvement and repainting projects. Tuesday's results will reveal whether RPM's operational efficiencies and pricing power can protect margins against a tough macro backdrop.

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4. Getting Schooled by Blue Bird

Team Hidden Gems

Team Hidden Gems has a 5-year price prediction of $84.32 for school bus maker Blue Bird (NASDAQ: BLBD), about 50% above today's $55.60. We've recommended the stock nine times since December 2024, with gains on our early buys and losses on our latest ones so far. Our April 2025 buy is up about 65%, and our May 2026 buy is down about 22%. Those losses haven't shaken our conviction, since few brands earn more trust from school districts than Blue Bird.

Plan B pays: Electric buses haven't sparked the upgrade cycle we expected. Tight school budgets struggle to cover their steep price, so electric models made up just 10% of Blue Bird's unit sales in its quarter ended in June 2026. Instead, many districts choose propane buses, which burn cleaner than diesel and cost much less than electric. Thanks to propane, more than half of the buses Blue Bird sold that quarter skipped diesel. Blue Bird gets paid for whichever bus a district picks, so its growth can outpace the slow shift to electric.
Bigger business, cheaper stock: In 2028, Blue Bird takes over Ford Motor Company's (NYSE:F) commercial chassis line, the frames under motorhomes and delivery trucks. That deal reaches customers far beyond cash-strapped school districts. Today's price buys this bigger business for less than we paid in spring 2026.

At about 12 times expected earnings, Blue Bird looks like the bargain we bought in April 2025.

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5. Today's Question!

Do you love a brand so much that you'd hold its stock through a bad quarter?

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