The Morning Filter 5 Core Stocks to Buy and Hold in 2026
Jan 5, 2026
This week, Dave Sekera, Morningstar's Chief U.S. Market Strategist, shares insights on the market's wild ride in 2025 and what lies ahead in 2026. He discusses a 50% fair value increase for Micron Technology, the competitive edge of Novo Nordisk over Eli Lilly in the obesity market, and reviews earnings from Darden Restaurants and FedEx. Dave also reveals his top five core stocks to hold, including Microsoft and Palo Alto Networks, emphasizing their strong moats and sound financials.
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Micron's Boom Could Be Cyclical
- Micron's price and margin surge reflects memory scarcity from the AI buildout, but memory is a commodity prone to cyclicality.
- Current earnings look strong but P/E ratios may be misleading across the cycle as margins normalize when supply returns.
Top-Line Growth Can Mask Margin Risk
- Darden is taking market share with value offerings but rising food costs will compress margins.
- Strong top-line growth may not translate to proportional profits if price increases lag inflation.
FedEx Shows Economic Resilience
- FedEx's resilient domestic ground volumes signal the U.S. economy isn't collapsing despite industrial headwinds.
- The firm’s better-than-expected results nudged its fair value up, but the stock still trades at a premium.
