Episode summary
Bloomberg Surveillance TV: February 27th, 2026 | Bloomberg Surveillance
Bloomberg Surveillance
· · 29 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Stephen Auth, Emil Michael, Amos Hochstein
Summary
Stocks were under pressure after the chip selloff, and Stephen Auth argued that the market’s valuation case has weakened even though earnings and the macro backdrop remain solid. He said the S&P 500 deserves a lower fair multiple because the Magnificent 7 are no longer the same free-cash-flow machines while they pour capital into AI, and because software-like businesses face new competitive pressure from AI itself. He cut his long-term market multiple view from 22 to 20, still above roughly 18 for the rest of the world, but warned investors to expect a single-digit return market rather than a double-digit one. He said dividend stocks and asset-heavy businesses look more attractive, and cited Amazon as a name he still likes.
The discussion then turned to the standoff between Anthropic and the Pentagon. The under secretary of defense said the department had offered written assurances on legal compliance, human oversight, and limits on surveillance and autonomous weapons, and accused Anthropic of walking away from negotiations unexpectedly. He argued the military needs multiple AI vendors, including Google on unclassified networks and xAI on classified and nonclassified networks.
Amos Hochstein then framed US-Iran talks as highly unstable and possibly a prelude to war. He said three paths remain: a limited strike, a larger operation that could trigger regime collapse, or continued pressure and diplomacy. He also warned that AI and advanced systems increasingly favor the US and Israel over Iran.
Key takeaways
- Stephen Auth said the S&P 500’s fair valuation should be lower now because AI spending has reduced Magnificent 7 free cash flow and software margins face disruption.
- Auth cut his long-term market multiple estimate from 22 to 20 and said investors should prepare for a single-digit return market.
- The under secretary of defense said the Pentagon had already conceded Anthropic’s substantive demands on legal limits and human oversight, but the company still walked away.
- Michael said the department wants multiple AI suppliers, including Google and xAI, because it is “smart to have more than one option.”
- Amos Hochstein said US-Iran tensions are serious enough that a limited strike or a broader campaign could be on the table, with AI widening the US military edge.
Notable quotes
“The sell-off was overdue given the violence of the last few weeks. We remain cautious on software names as many are potential value traps”
“ultimately At the end of the day, we follow the law, all laws. Um, but we can't let any one company stand between us and the war fighter”
“There are three basic options here on this war. Only three”
How the episode opens
Bloomberg Audio Studios podcasts radio news. This is the Bloomberg Surveillance Podcast. I'm Jonathan Pharaoh along with Lisa Abramitz and Amarie Hordern.
Join us each day for insight from the best in markets, economics, and geopolitics. From our global headquarters in New York City, we are live on Bloombo television weekday mornings from 6:00 to 9:00 a.m. Eastern.
Subscribe to the podcast on Apple, Spotify, or anywhere else you listen. And as always, on the Bloomberg terminal and the Bloomberg Business app, we begin this hour with stock sliding following yesterday's chip route. Steven North, the Federated lowering his year-end price target on the S&P to 7,500 and writing this.
The sell-off was overdue given the violence of the last few weeks. We remain cautious on software names as many are potential value traps. Steve joins us now for more.
Steve, welcome to the program. I've been looking forward to catching up with you, sir. really interesting note.
I think we should start from this. You are not bearish. You still think earnings are going to be okay.
This seems to be a call on valuation. Steve, just share with us your thoughts about how your thoughts on valuations are developing and comparing now to maybe where we were a few decades ago.
Yeah, Jonathan. Actually, the piece you cited was really inspired by a conversation you all were having on surveillance a couple of weeks ago about the confusion around the macros seem to be pretty good yet the market is having trouble. And I think the what what we're saying is the reason the macros are pretty good.
Um, but the problem with the market right now is that there's a whole hunk of it that was dependent on two different arguments for why it should have a higher valuation.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- global markets
- equity outlook
- investment management
- economy
- defense outlook
Companies and tickers mentioned
- FHI
- Federated Global Investment Management Group
- TWG Global
Watch the episode
Watch “Bloomberg Surveillance TV: February 27th, 2026 | Bloomberg Surveillance” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from Bloomberg Surveillance
-
Stocks Rise as Inflation Data Ease Fed-Hike Worry | Bloomberg Surveillance -
Bloomberg Surveillance TV: November 13th, 2026 | Bloomberg Surveillance -
Bloomberg Surveillance TV: November 12th, 2026 | Bloomberg Surveillance -
Jensen Huang Ousted by Nvidia Board as CEO | Bloomberg Surveillance -
Bloomberg Surveillance TV: November 11th, 2026 | Bloomberg Surveillance -
AI Stocks Rebound as Fed Hike Bets Return | Bloomberg Surveillance
Bloomberg Surveillance, this episode and its artwork belong to Bloomberg. Octagon is not affiliated with the show; this page is an independent summary.
