The AI capex boom is so far only showing up in the sellers’ margins (the hyperscalers), not the buyers of AI. This is important because the longer it takes the S&P 493 to generate ROI, the bigger the downside risks to an economy and a market this concentrated in the AI trade - coped via Torsten Slok. Me: the AI boom has gotten way ahead of itself and values look sure to correct, which will pressure equity values, investor balance sheets, consumer spending and the economy. AI is transformative, but most existing legacy companies are not yet able to apply it effectively to their businesses.
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