“AI” Tops “Earnings”

With traders and investors focused on the power of AI, it’s no surprise that corporate executives are willing to tell them what they want to hear.

Mentions of AI have not only surged on earnings calls – they’ve topped the term “earnings” itself:

AI continues to drive the narrative on Wall Street, particularly during earnings calls. (Source: Chartr)

With many tech stocks now spending more than 100% of their free cash flow on AI projects, the fear is things may turn nasty.

The recent rally in AI stocks stoked investors’ concerns that prices for tech stocks had gone higher than earnings from the companies justify.

That the calls are buzzing with questions about productivity gains and overinvestment is a good sign that investors are trying to be realistic about what the tech actually produces.

Are they…? The question remains.

Worst case, management teams feel they need to have a competitive strategy in AI — whether needed or not — just to keep shareholders happy.

~ Addison

P.S. This week in Grey Swan Live!, at 2 p.m. ET/11 a.m. PST, we’ll be joined by our natural-resources specialist, Shad Marquitz, for a prescient look at volatility and opportunity in oil, energy, rare earths and precious metals following the Iran bombing excursion.

With traders and investors focused on the power of AI, it’s no surprise that corporate executives are willing to tell them what they want to hear.

Mentions of AI have not only surged on earnings calls – they’ve topped the term “earnings” itself:

AI continues to drive the narrative on Wall Street, particularly during earnings calls. (Source: Chartr)

With many tech stocks now spending more than 100% of their free cash flow on AI projects, the fear is things may turn nasty.

The recent rally in AI stocks stoked investors’ concerns that prices for tech stocks had gone higher than earnings from the companies justify.

That the calls are buzzing with questions about productivity gains and overinvestment is a good sign that investors are trying to be realistic about what the tech actually produces.

Are they…? The question remains.

Worst case, management teams feel they need to have a competitive strategy in AI — whether needed or not — just to keep shareholders happy.

~ Addison

The stock market is getting an unexpected boost to kick off August, bucking the historically weak summer session for the U.S. stock market.

What’s happening? The Bank of Japan and the U.S. Treasury are making a coordinated effort to support Japanese yen; a move last attempted nearly 30 years in the height of the Asian Financial contagion (1998).

Global opportunities aside, the US stock market’s stealthy reset of sectors outside the complex AI trade means solid U.S. companies are offering attractive entry prices, particularly in energy, rare earths and critical minerals.

The next phase of the AI boom won’t be decided by who builds the fastest chips, but by who can keep them powered.

Even retail investors are now increasingly skeptical of the AI space, particularly its cash flow. And rightly so…

The stock market is getting an unexpected boost to kick off August, bucking the historically weak summer session for the U.S. stock market.

The next phase of the AI boom won’t be decided by who builds the fastest chips, but by who can keep them powered.

Even retail investors are now increasingly skeptical of the AI space, particularly its cash flow. And rightly so…