Andrew Zatlin: Time for an AI Pause?

Nvidia’s earnings report last night measured a new headwind blowing up against the big AI stocks.

Don’t panic.

At least, not yet.

Yes, growth is slowing down. What can you expect when you have 50% growth happening year over year over year?

At some point in time that stops.

We’re seeing the first signs of that with Nvidia reporting a slowdown in AI server revenues – but that’s hardly reflected in the market price yet.

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Nvidia’s market cap is already more than that of all UK stocks, and is now closing in on the market cap of all of Japan!

However, when everything has already priced this massive, massive growth rate and it needs to be readjusted, you got revaluations.

That’s normal. To be expected.

That’s also why big tech companies can post great growth numbers, even as they’re moving to reduce their employee headcount.

And that’s kind of where we are right now in the AI world, whether it’s Nvidia or Palantir.

Think of it as a highway. The highways have been built and they’re continuing to be built, but the bulk of it is out there. Now. It’s all the businesses at the off-ramps. It’s all the shopping centers, all the movie theaters, all the things that superhighway enables all those services. That’s where we are right now.

All of these secondary businesses are going to grow.

Not a moment of panic, but you should beware the AI trend, as Sam Altman noted, it’s bubbly.

From the hardware perspective, we’re more on the down slope of growth, heading more towards the 20%, 25%, and away from the 40%, 50% levels. And that means some new pricing reevaluations.

An AI pullback will trigger associated pullbacks in the coming weeks.

But we’ve got the rate cut potential impact further out, which should cause AI stocks to trend even higher going into the end of the year.

~ Andrew Zatlin

P.S. from Addison: That insight from Andrew Zatlin is just a small appetizer for the main event: our discussion on Grey Swan Live! shortly.

We’ll cover how Andrew views the labor market, why he’s been more accurate than other forecasters – garnering the #1 ranking on Bloomberg – and look at how his views fit in with many of the potential Grey Swan events we see occurring in the months ahead – including the possibility of a “most terrifying bull market.”

It’s another Grey Swan Live! you won’t want to miss – all part of the incredible value our members enjoy week after week.

If you’re not a member, click here to join now and get access to every Grey Swan Live! (including a recording of today’s Zoom), Special Reports and more.

P.P.S. We’re also hosting a free live tax seminar on how to keep more of your gains with IRS-compliant strategies tomorrow, August 29, at 1 p.m. ET. Registration is free and easy — reserve your spot here.

If you have any questions for us about the market, send them our way now to: Addison@GreySwanFraternity.com.

Nvidia’s earnings report last night measured a new headwind blowing up against the big AI stocks.

Don’t panic.

At least, not yet.

Yes, growth is slowing down. What can you expect when you have 50% growth happening year over year over year?

At some point in time that stops.

We’re seeing the first signs of that with Nvidia reporting a slowdown in AI server revenues – but that’s hardly reflected in the market price yet.

Turn Your Images On

Nvidia’s market cap is already more than that of all UK stocks, and is now closing in on the market cap of all of Japan!

However, when everything has already priced this massive, massive growth rate and it needs to be readjusted, you got revaluations.

That’s normal. To be expected.

That’s also why big tech companies can post great growth numbers, even as they’re moving to reduce their employee headcount.

And that’s kind of where we are right now in the AI world, whether it’s Nvidia or Palantir.

All of these secondary businesses are going to grow.

Not a moment of panic, but you should beware the AI trend, as Sam Altman noted, it’s bubbly.

From the hardware perspective, we’re more on the down slope of growth, heading more towards the 20%, 25%, and away from the 40%, 50% levels. And that means some new pricing reevaluations.

An AI pullback will trigger associated pullbacks in the coming weeks.

But we’ve got the rate cut potential impact further out, which should cause AI stocks to trend even higher going into the end of the year.

~ Andrew Zatlin

P.S. from Addison: That insight from Andrew Zatlin is just a small appetizer for the main event: our discussion on Grey Swan Live! shortly.

It’s another Grey Swan Live! you won’t want to miss – all part of the incredible value our members enjoy week after week.

If you’re not a member, click here to join now and get access to every Grey Swan Live! (including a recording of today’s Zoom), Special Reports and more.

If you have any questions for us about the market, send them our way now to: Addison@GreySwanFraternity.com.

Mining stocks amplify everything. First Majestic went from losing money to 45% margins without building anything new. They just held the line on costs while silver did the heavy lifting.

That cuts both ways. If silver drops hard, margins compress just as fast. Same leverage, opposite direction.

The miners with the lowest costs and cleanest balance sheets will hold up best in a pullback and capture the most upside if the deficit keeps grinding.

Economists at Goldman Sachs said this morning they expect core inflation to finish the year around 2% even while GDP rises at a “surprisingly strong” 2.5% clip.

In our view, their inflation forecast is optimistic. Their GDP call? Modest.

The last time we pumped this much liquidity into the system — 2020 through 2022—the result was a manic asset bubble, runaway inflation, and an epic hangover at the Fed.

Goldman’s optimism has triggered a fresh round of bullish bets: cyclical stocks are rallying, “dispersion” in the S&P 500 is spiking, and the Fed is expected to cut interest rates twice before Jerome Powell gets kicked out of Washington at the end of his term on May 15.

Anecdotally, we’re hearing stories of warehouses full of GPUs sitting unused for lack of energy to power them. It’s a natural feature of the heavy capital investment in new machines. The grid has to catch up!

While Trump’s great reset rolls on in 2026, keep an eye on modular nuclear reactors and increased demand for uranium, natural gas and related resources.

These PM producers are literally printing the most ‘hard money’ that they ever have at these metals prices and record margins here at the midway point in Q4.

If there ever was a time for this sector to get overheated and frothy, this would be it… only that isn’t what we’ve seen playing out.

PM producers are still insanely profitable at even at current metals prices and should be far more valuable based on their margins, revenue generating potential, and their resources still in the ground.