The AI movement is like the internet in the 90s.
People are very excited and everyone wants to be part of it. Valuation are extremely high within VC and for public companies.
Despite the high prices I want to focus on the second wave, the actual monetization of AI.
After the dot-com crash, we slowly started the grind back towards the prior highs. The tech was now being monetized and we saw the biggest businesses ever develop from it.
I expect something similar in AI where initially excited p...
People are very excited and everyone wants to be part of it. Valuation are extremely high within VC and for public companies.
Despite the high prices I want to focus on the second wave, the actual monetization of AI.
After the dot-com crash, we slowly started the grind back towards the prior highs. The tech was now being monetized and we saw the biggest businesses ever develop from it.
I expect something similar in AI where initially excited p...
2
Sticky inflation and high interest-rates are keeping a lid on the growth stocks at the forefront of major secular trends...
Their market caps aren't soaring right now but their underlying businesses are growing at a rapid pace. These stocks are like coiled springs and will shoot higher when the risk free rate stops rising.
AI, autonomous driving/EVs, e-commerce, cloud, fintech/online payments, robotics are major secular trends and the leading businesses in these industries are redefining how hu...
Their market caps aren't soaring right now but their underlying businesses are growing at a rapid pace. These stocks are like coiled springs and will shoot higher when the risk free rate stops rising.
AI, autonomous driving/EVs, e-commerce, cloud, fintech/online payments, robotics are major secular trends and the leading businesses in these industries are redefining how hu...
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This week we have:
1. Four Magnificent 7 companies report earnings: $Microsoft(MSFT.US$ , $Alphabet-A(GOOGL.US$ , $Meta Platforms(META.US$ , and $Tesla(TSLA.US$
2. Nvidia, $NVIDIA(NVDA.US$ , officially down 20% from its peak
3. Super Micro Computer, $Super Micro Computer(SMCI.US$ , down nearly 50% from its peak
4. March PCE inflation data is reported
What’s your boldest prediction for the week?
1. Four Magnificent 7 companies report earnings: $Microsoft(MSFT.US$ , $Alphabet-A(GOOGL.US$ , $Meta Platforms(META.US$ , and $Tesla(TSLA.US$
2. Nvidia, $NVIDIA(NVDA.US$ , officially down 20% from its peak
3. Super Micro Computer, $Super Micro Computer(SMCI.US$ , down nearly 50% from its peak
4. March PCE inflation data is reported
What’s your boldest prediction for the week?
4
1
-Cloud spend continues to have growth. 27% of total IT spend in cloud and 42% of workloads in cloud.
-AI spend remains early. Vast majority of respondents indicated AI spend this year will be <5% of total budget
- $Microsoft(MSFT.US$ / OpenAI remains preferred model / infra by far. $Amazon(AMZN.US$ / Anthropic a distant second [bear in mind these are traditional, legacy enterprises being surveyed – not AI startups]
-Big 4 recipients of cloud spend are $Microsoft(MSFT.US$ , ...
-AI spend remains early. Vast majority of respondents indicated AI spend this year will be <5% of total budget
- $Microsoft(MSFT.US$ / OpenAI remains preferred model / infra by far. $Amazon(AMZN.US$ / Anthropic a distant second [bear in mind these are traditional, legacy enterprises being surveyed – not AI startups]
-Big 4 recipients of cloud spend are $Microsoft(MSFT.US$ , ...
2
US private sector financial assets are 6.0x larger than the entire US economy, near the record of 6.3x.
The value of these assets has skyrocketed with the S&P 500 up nearly 25% since October 2023.
Even during the Great Financial Crisis, this ratio peaked at ~5.0x just before QE started in 2008.
After interest rates were slashed to zero and $4 trillion in stimulus was handed out, financial assets in the US have seen the largest surge in history.
As a result, with the top 1% of Americans now contr...
The value of these assets has skyrocketed with the S&P 500 up nearly 25% since October 2023.
Even during the Great Financial Crisis, this ratio peaked at ~5.0x just before QE started in 2008.
After interest rates were slashed to zero and $4 trillion in stimulus was handed out, financial assets in the US have seen the largest surge in history.
As a result, with the top 1% of Americans now contr...
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This is incredible:
The US Federal debt is set to DOUBLE in just 8 years, rising from $20 trillion in 2017 to $40 trillion in 2025.
Currently, US Federal debt is rising by a whopping $1 trillion every 100 days.
To put this in perspective, if US debt hits $40 trillion in 2025 that would be a $17 TRILLION increase since 2020.
That would be a ~570% jump in US Federal debt since 2000, a 25-year period.
The worst part?
This analysis assumes that we are on track for a "soft landing."
What happens if a...
The US Federal debt is set to DOUBLE in just 8 years, rising from $20 trillion in 2017 to $40 trillion in 2025.
Currently, US Federal debt is rising by a whopping $1 trillion every 100 days.
To put this in perspective, if US debt hits $40 trillion in 2025 that would be a $17 TRILLION increase since 2020.
That would be a ~570% jump in US Federal debt since 2000, a 25-year period.
The worst part?
This analysis assumes that we are on track for a "soft landing."
What happens if a...
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Crazy chart:
The Nasdaq 100 index, relative to commodities has reached the highest level since the Dot-com bubble.
Meanwhile, US tech market cap share of the total US equity market is at 33%, also the largest since March 2000.
Since 2021, the Nasdaq 100 has DOUBLED relative to commodity prices.
This also comes as the market cap of the Magnificent 7 has passed $10 trillion for the first time in history.
Tech stocks ARE the stock market.
$Nasdaq Composite Index(.IXIC.US$ $S&P 500 Index(.SPX.US$ $Dow Jones Industrial Average(.DJI.US$ $Apple(AAPL.US$ $NVIDIA(NVDA.US$ $Microsoft(MSFT.US$
The Nasdaq 100 index, relative to commodities has reached the highest level since the Dot-com bubble.
Meanwhile, US tech market cap share of the total US equity market is at 33%, also the largest since March 2000.
Since 2021, the Nasdaq 100 has DOUBLED relative to commodity prices.
This also comes as the market cap of the Magnificent 7 has passed $10 trillion for the first time in history.
Tech stocks ARE the stock market.
$Nasdaq Composite Index(.IXIC.US$ $S&P 500 Index(.SPX.US$ $Dow Jones Industrial Average(.DJI.US$ $Apple(AAPL.US$ $NVIDIA(NVDA.US$ $Microsoft(MSFT.US$
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Feels liked the market just searched for a reason to pull back.
If this truly was either the Ukraine nato news, the fed comment or any other real reason we would have seen a reaction on the bond market or from yields.
Instead we actually closed lower on yields and higher on bonds.
This is the first pullback that is hard to explain in a while which makes me believe that’s all it is.
Macro elements could still further deteriorate which is something you might want to look for as a follow up to t...
If this truly was either the Ukraine nato news, the fed comment or any other real reason we would have seen a reaction on the bond market or from yields.
Instead we actually closed lower on yields and higher on bonds.
This is the first pullback that is hard to explain in a while which makes me believe that’s all it is.
Macro elements could still further deteriorate which is something you might want to look for as a follow up to t...
1
The ratio between tech stocks and the S&P 500 is now over 2 standard deviations ABOVE its historical mean.
Even during the Dot-com bubble of the late 1990s’, this metric peaked at 1.6 standard deviations.
Since 2008, tech stocks have consistently outperformed the S&P 500.
During this time, the Nasdaq Composite and the S&P 500 returned 1,167% and 667%, respectively.
With the mergence of AI, US markets are now almost entirely driven by tech stocks.
Are we overdue for a correction? $Apple(AAPL.US$ $Amazon(AMZN.US$ $Tesla(TSLA.US$ $Microsoft(MSFT.US$ $Alphabet-C(GOOG.US$ $S&P 500 Index(.SPX.US$ $Nasdaq Composite Index(.IXIC.US$
...
Even during the Dot-com bubble of the late 1990s’, this metric peaked at 1.6 standard deviations.
Since 2008, tech stocks have consistently outperformed the S&P 500.
During this time, the Nasdaq Composite and the S&P 500 returned 1,167% and 667%, respectively.
With the mergence of AI, US markets are now almost entirely driven by tech stocks.
Are we overdue for a correction? $Apple(AAPL.US$ $Amazon(AMZN.US$ $Tesla(TSLA.US$ $Microsoft(MSFT.US$ $Alphabet-C(GOOG.US$ $S&P 500 Index(.SPX.US$ $Nasdaq Composite Index(.IXIC.US$
...
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Stock concentration is now at Great Depression levels:
According to Goldman Sachs, the market cap of the largest stock is now 750 TIMES the market cap of a 75th percentile stock.
To put this in perspective, even at the peak of the 2000 Dot-com bubble the metric only hit 550x.
We officially have a higher stock concentration than the peak of the Great Depression in 1932.
The top 10% of stocks in the US now reflect ~75% of the entire market.
Big tech IS the stock market.
$Apple(AAPL.US$ $Microsoft(MSFT.US$ $Amazon(AMZN.US$ $NVIDIA(NVDA.US$ $Tesla(TSLA.US$
According to Goldman Sachs, the market cap of the largest stock is now 750 TIMES the market cap of a 75th percentile stock.
To put this in perspective, even at the peak of the 2000 Dot-com bubble the metric only hit 550x.
We officially have a higher stock concentration than the peak of the Great Depression in 1932.
The top 10% of stocks in the US now reflect ~75% of the entire market.
Big tech IS the stock market.
$Apple(AAPL.US$ $Microsoft(MSFT.US$ $Amazon(AMZN.US$ $NVIDIA(NVDA.US$ $Tesla(TSLA.US$
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