Wall Street Breakfast Podcast: Selloff To Surge In Defense

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Defense stocks rebound after-hours as Trump proposes $1.5T ‘Dream Military’ budget plan. (00:23) Ford (F) to get eyes-off driving tech, starting with $30,000 EV in 2028. (01:53) Alphabet (GOOG) (GOOGL) is worth more than Apple (AAPL) for the first time since 2019. (02:16)

This is an abridged transcript.

Defense stocks have rebounded sharply, which was triggered by a Truth Social post from President Trump, where he proposed a historic $1.5T defense budget for fiscal year 2027.

This represents a substantial increase from the previously discussed $1T figure.

Trump said in a Truth Social post that he made the decision on 2027 military spending “after long and difficult negotiations with Senators, Congressmen, Secretaries, and other Political Representatives… especially in these very troubled and dangerous times.”

In his social media post, Trump indicated the higher budget “will allow us to build the ‘Dream Military’ that we have long been entitled to and, more importantly, that will keep us SAFE and SECURE, regardless of foe.”

Trump suggested that tariff revenue would help fund the increased military spending “at the same time, pay down debt, and likewise, pay a substantial Dividend to moderate income Patriots within our Country!”

This was a turnaround after the sector plummeted on Wednesday after President Trump issued an executive order and a series of social media posts threatening to block dividends, halt stock buybacks, and cap executive pay for underperforming contractors.

For example, Lockheed Martin (LMT) is up 7% premarket after falling 4.8% on Wednesday. General Dynamics (GD) is up nearly 5% after a 4.1% drop.

Ford (F) plans to introduce its first Level 3 “eyes-off” driver-assistance system in 2028, allowing drivers to remove hands and eyes from the road on certain highways.

The debut vehicle could be a midsize electric truck priced around $30,000. The eyes-off feature will cost extra via subscription or upfront fee.

Alphabet (GOOG) (GOOGL) is now the world’s second-most valuable company and is worth more than Apple (AAPL) for the first time since 2019.

Shares of Alphabet (GOOG) (GOOGL) rose more than 2% on Wednesday, lifting its market capitalization to $3.89T. Apple’s (AAPL) market cap now stands at $3.86T, after a 0.8% drop in its share price on Wednesday.

Wall Street analysts have noted that Alphabet’s (GOOG) (GOOGL) Gemini is quickly closing the gap with OpenAI’s (OPENAI) ChatGPT, which is currently the top AI model.

In addition, Alphabet (GOOG) (GOOGL) is looking to challenge Nvidia’s (NVDA) dominance in the AI computing market with its custom tensor processing units.

But Apple (AAPL) has lagged its rivals in the AI race, and the iPhone maker hasn’t had a major AI launch since it announced Apple Intelligence in 2024.

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Catalyst watch:

• The ASCO Gastrointestinal Cancers Symposium will begin. Some of the notable companies with abstracts or drug data presentations include Astellas Pharma (ALPMF), Alpha Tau Medical (DRTS), Autonomix Medical (AMIX), RenovoRx (RNXT), and BullFrog AI (BFRG).

• Marks and Spencer (MAKSF) is scheduled to release its Christmas Trading Statement.

Dow, S&P and Nasdaq futures are in the red. Crude oil is up 1% at $56/barrel. Bitcoin is down 1.2% at $90,000. Gold is down 0.5% at $4,430.

The FTSE 100 is down 0.3% and the DAX is up 0.1%.

The biggest movers for the day premarket: Canadian Solar (CSIQ) -6% – Shares slipped after announcing a $200M private offering of convertible senior notes due 2031, with an option for initial purchasers to buy an additional $30M within 13 days.

On today’s economic calendar: