More clues on the consumer... AI is holding up the economy... The energy secretary's top concern... Another circular deal in the AI money loop... A new Hall-of-Fame pick...
More bad news from retail earnings...
Yesterday, we highlighted a red flag from the "real economy."
Home-improvement giant Home Depot (HD) – a bellwether for the U.S. economy – blamed a weaker consumer for its poor quarterly sales and earnings outlook.
Today, the hits kept coming. This time, it was big-box retailer Target (TGT) making headlines...
Like Home Depot, Target reported a mixed third quarter, with revenue falling short but earnings beating Wall Street's expectations. That was about where the good news ended.
Target's sales fell on a year-over-year basis for the fourth straight quarter (and seventh out of the last 10 quarters). The company reported that both the number of transactions (foot traffic) and the average transaction amount declined. That was even with the company lowering prices to try to drum up sales.
Target reported a slight decline in its margins, "reflecting merchandising pressure from increased markdowns."
Target doesn't expect that to change anytime soon... The company forecasts a small decline in sales in its fourth quarter. That's incredibly telling since the fourth quarter includes the holiday shopping season.
According to CNBC, Target's CEO declined to put a timeline on when he thought the company would see positive sales growth again.
It's like what Home Depot's Chief Financial Officer Richard McPhail said yesterday: "It's hard to identify near-term catalysts that would lead to acceleration" in sales. Put another way, folks are shopping less. And when they do shop, they're spending less than they were at this time last year.
Tomorrow morning, we'll get one last read on the consumer when Walmart (WMT) releases its quarterly report. If it's anything like Target's and Home Depot's, it'll show more evidence of folks pulling back on spending and looking for deals – if not avoiding shopping altogether.
That's not what we traditionally see during strong economies.
That leaves artificial-intelligence ("AI") spending to pick up the economic slack...
AI infrastructure spending contributed to 1.1% of gross domestic product ("GDP") growth in the first half of the year, according to a report from JPMorgan Chase. Without this spending, GDP would have declined by much more than 0.6% during the first quarter.
But all of this AI infrastructure – like data centers – needs plenty of electricity. That's why Big Tech is securing power supplies directly from utility companies.
And it's why Constellation Energy (CEG) plans to spend $1.6 billion to restart the Three Mile Island nuclear plant in Pennsylvania. When it closed in 2019, the plant had the capacity to power more than 800,000 homes, according to CNBC. But when it reopens, the plant (now called the Crane Clean Energy Center) won't be powering homes...
Constellation is selling the power to Microsoft (MSFT) in a 20-year agreement. The software company will use that power for its data centers.
Still, heavy investment in AI and data centers is going to use up a lot more power in the coming years...
As we wrote in the September 3 Digest, electricity prices have become the energy secretary's top concern. There's only so much grid capacity to go around.
The government has a solution...
The Department of Energy is loaning Constellation $1 billion to help reopen the Crane Clean Energy Center. In a call with reporters, Greg Beard, senior advisor to the Energy Department's Loan Programs Office, said the loan would protect electricity prices for everyday consumers.
It makes sense...
If Constellation doesn't have to foot the full bill for restarting the plant, it doesn't have to pass those costs on to consumers to recoup its investment.
But the Crane Clean Energy Center won't be operational for another two years. And AI investment continues to pick up.
More from the September 3 Digest...
[I]ncreasing power capacity will take longer. It means building new plants, new transmission lines, and even new nuclear reactors. So supply may not keep up with demand just yet.
That would likely mean the upward trend in electricity continues – and more sleepless nights for the energy secretary... and perhaps for people struggling to pay their electric bills.
Still, the Constellation loan is a good start to help ease the strain on the energy grid and increase power supply. And the government could extend this strategy to restart other nuclear facilities or look to other energy sources like natural gas.
Another 'circular' AI investment...
In other news, AI research startup Anthropic recently got a boost of new investments – $5 billion from Microsoft (MSFT) and $10 billion from Nvidia (NVDA). Altogether, the privately held Anthropic is now valued at $350 billion – which would make it the 24th-largest company in the S&P 500 Index if it were public.
Like other partnerships and investments we've seen in the AI space recently, this one is circular. As part of the investment, Anthropic agreed to purchase $30 billion in cloud computing from Microsoft's Azure business and 1 gigawatt of computing power using Nvidia's AI chips.
So for a $15 billion investment today, Anthropic pledged more than $30 billion in spending sometime in the future.
That's all well and good for now... Anthropic gets a cash infusion, and Nvidia and Microsoft get pledges for future orders that they can boast about in earnings reports and at investor conferences.
But we'll remind you of the warning from our Director of Research Matt Weinschenk in his October 3 This Week on Wall Street...
And this circular nature of AI spending creates risks... It suggests that any crash will be swift and severe.
Put simply, these deals work – until they don't. Since every AI company is invested in – or has pledges from – one or more of its partners, all it takes is one failure to bring the entire circle down.
In the meantime, tech companies and the U.S. government seem more than happy to invest in other tech and AI startups.
Finally, today we have a new Hall of Famer to report...
As eagle-eyed readers might have spotted yesterday, there is a new name in the Stansberry Research Hall of Fame, which we publish at the bottom of our daily e-mail. It represents the highest-returning closed positions in Stansberry Research history.
The newest name is from Stansberry Venture Technology editor Dave Lashmet – a 1,034% gain in a partial position of Rocket Lab (RKLB) in about two years and five months.
Dave recommended the stock back in June 2023 because of its Electron rocket, a small and reusable design that makes it cheaper for companies to get their gear into space.
At the time, Rocket Lab had been winning a bevy of contracts and had a $500 million order backlog for the Electron, and Dave highlighted that the U.S. Space Force and Navy could become long-term buyers.
In short, Dave said the company fit the 10-to-1 risk-reward profile he looks for in Venture Technology recommendations.
In his model portfolio, Dave sold half of a position in Rocket Lab in October 2024 for a 101% gain.
But last month, he wrote to subscribers that the model portfolio was up 1,000% in the remaining half position, so it was time to sell half of that position to lock in more gains...
It was a matter of risk management, Dave told subscribers...
Now, we think there are more gains ahead.
For starters, there have been very public fights between Elon Musk, who owns rival SpaceX, and decision-makers in the government and commercial sectors. That could drive companies looking for stability to Rocket Lab.
Plus, Rocket Lab is working on a medium-lift reusable rocket called Neutron. If successful, it would be a major competitor to SpaceX's Falcon 9. However, there's a chance that Neutron won't succeed on its first attempt... second attempt... or third attempt. That's when the stock would start to get beaten down.
SpaceX's Starship exploded multiple times this year. And Firefly Aerospace's rocket exploded during preflight tests.
If something similar happens during the initial Neutron flight, Rocket Lab's stock would tumble in the near term. So we're going to take some of our winnings off the table and keep a quarter position in the model portfolio.
This sell advice was a prudent call. Rocket Lab shares are down more than 30% since Dave told subscribers to take profits, and last week, the company pushed back its latest Neutron test flight to the first quarter of 2026.
Congrats to Dave and the subscribers who followed his advice on this great call.
New 52-week highs (as of 11/18/25): Amgen (AMGN), Barrick Mining (B), ProShares Ultra Nasdaq Biotechnology (BIB), Coca-Cola Consolidated (COKE), Freehold Royalties (FRU.TO), Gilead Sciences (GILD), iShares Biotechnology Fund (IBB), Medtronic (MDT), Monster Beverage (MNST), Omega Healthcare Investors (OHI), Roche (RHHBY), and Valero Energy (VLO).
In today's mailbag, we received several notes from people who weren't able to watch "The Stocks That Save America Summit," which was rescheduled from yesterday morning to last night. Good news for anyone interested: You can watch a replay of the event here at your convenience... and we suggest you do.
Expert natural resources investor Rick Rule and a special guest discuss what they say could be the biggest story in the market in the coming decade. It's why the U.S. government has been rushing to use taxpayer funds to buy stakes of publicly traded companies, sending their stocks surging – sometimes overnight.
All the best,
Nick Koziol and Corey McLaughlin
Baltimore, Maryland
November 19, 2025
