The Watchlist is getting a refresh for the start of 2026. This update includes a series of upgrades and downgrades that reflect meaningful shifts in the underlying investment theses. The changes incorporate updated assessments of valuation, competitive moat, financial performance, and management transitions, alongside broader industry dynamics and an evolving economic outlook.
Rather than a static annual list, this will be a living evaluation. Updates will be provided more frequently as conditions change. The focus is on cutting through the performative noise of the daily news cycle to find companies with real structural staying power.
Upgrades
Accenture (NYSE:ACN) had a challenging 2025 as DOGE-related sentiment, fears of AI cannibalization, and trade tensions weighed on the stock, but the underlying fundamentals remained strong. While federal contract fears and AI cannibalization concerns dominated the headlines, these are largely transitory issues or premature risks, as DOGE was political theater and true AGI is still years away.
The firm’s real strength is its “data intimacy” through relationships with 89 of the Fortune 100, which provides a massive moat. This deep knowledge of how global leaders process data allows Accenture to build or help client’s build specialized AI products that generic competitors simply cannot match.
Solidified in A Tier.
Pinterest (NYSE:PINS) s not a dominant leader in digital advertising and occupies a relatively narrow niche within the broader ad platform landscape. Competitive pressure remains intense, which was evident in the most recent earnings report and the accompanying softer guidance. That said, the company continues to demonstrate improvement in several key operating metrics, including expanding profitability and double-digit percentage growth in monthly active users.
Beyond fundamentals, Pinterest has several characteristics that add to its appeal. The company has surfaced in acquisition speculation in the past, and with a market capitalization under $20 billion, it is reasonably sized for potential strategic M&A in an environment where larger platforms are seeking growth through consolidation. Additionally, Pinterest is not currently a member of the S&P 500, making it a potential candidate for inclusion should its market capitalization recover to levels seen in prior years.
Initiated in C Tier.
Downgrades
Still bullish on Netflix (NASDAQ:NFLX) but moving to a more cautious stance: the core investment drivers remain global scale, strong cash generation, and a capable, efficiency‑focused management team, plus upside from pricing power and continued subscriber growth. However, execution has historically been part of the moat, and the expanding mix (ads, live events, gaming) is not yet delivering a clear, needle‑moving payoff versus the complexity and capital it adds. The ad tier is promising, but revenue is still a relatively small part of the story.
Downgraded to A Tier.
PayPal (NASDAQ: PYPL) remains a troubled name in the market, stuck in stagnation since 2022. CEO Alex Chriss has yet to shift the narrative despite new product launches and strategic partnerships. While growth has technically returned, single-digit gains are underwhelming, and the renewed focus on profitability has come at the cost of platform activity.
PayPal still holds a dominant position in digital payments, but competition is rising and its once-formidable data moat is eroding with time. Chriss and his team have yet to demonstrate that they recognize or plan to fully leverage this advantage, leaving the company’s strategic direction unclear.
Downgraded to C Tier.
The Trade Desk (NASDAQ: TTD) has been a leader in programmatic advertising and a strong advocate for the open internet. However, technology giants such as Amazon and Google continue to expand their advertising ecosystems, and market behavior suggests advertisers are increasingly willing to accept the trade-offs of walled gardens, including reduced transparency and control, in exchange for scale, closed-loop measurement, and more consistent performance.
CEO Jeff Green’s principled leadership and commitment to doing the right thing remain notable strengths, and customer retention and profitability metrics remain solid. That said, revenue growth has continued to decelerate, raising questions about the durability of the company’s growth advantage as competition intensifies and large platforms consolidate share. Kokai, the company’s AI-driven platform, has yet to materially alter the growth trajectory. Even after the significant decline in the stock price, shares continue to trade at a substantial premium, suggesting growth expectations remain lofty and leave little margin for execution missteps.
Downgraded to Bench.
