AI Stocks Predictions

[19:18] I believe some of these companies will end up going bankrupt. I mean, Oracle has um their debt is two and a half times their sales from last year. It's just enormous amounts of debt that has been poured on into this market.

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[18:58] I think going forward from here the anything else trade is going to do better than the AI tech trade.

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[8:07] I'm still bullish on a lot of things. But I I want to explain myself and and that's why I'll get to the to the slide deck if that makes sense.

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[13:39] demand for compute is still going up. We don't even know, but let's say five or six times a year and and supply is just not staying not not not keeping up. And so, the question at some point it will and every time I talk to investors they're like, you know, when do you think that'll happen? It doesn't seem like it's happening anytime soon. But let's just say that we don't know when it's going to happen. It seems to us a ways out. That's why I think you just have to stay fully invested.

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[21:44] We haven't actually fostered off into the productivity side of that yet. That's probably another year out. So I'll probably update this in the next year or so

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[27:47] The AI stocks I think are just grossly overvalued. based on based on future earnings but may or may not come... we're going to get that scale back and that's going to affect the prices of um you know the companies that that that are you know building the data centers where it's a major part of their business. So I we've already started to see you look at Nvidia or um Microsoft or um Amazon all these companies their stock prices have come down 15 to 20% over the last month... I think we're going to continue to see that.

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[44:56] his boldest calls for a year from now — including a bursting AI bubble and Bitcoin below $20,000.

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[7:34] I don't think the capex to be honest with you is going to stop a slow down anytime soon uh year or next year.

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[15:28] I think this capex spend trend and boom is going to continue into 2027. And when these hyperscalers are announcing earnings, you know, later in July, I think they're all going to really reiterate reiterate their their capex intentions for 2027.

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[36:45] the way I see these models progressing over the next years that ultimately they're going to get commoditized because you know, they all the new models as they come out they kind of leapfrog each other.

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[24:06] if you're playing the infrastructure development trade, that's got another year, 18 months to it, maybe two years, but that's going to end. And that whole infrastructure side of the trade is going to go away, and you're going to have to move to the revenue generation side of of the trade.

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[12:14] We believe there's going to be a bust. They're doing everything artificially to prop this market up.

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[32:57] what I am petrified about is that we a lot of these stocks have not really reflected that they've assumed that the demand is based upon this three months that was just kind of a stupid aberration like I call it the token mirage. And that there's going to be a huge wakeup call when all of a sudden we realize that we mistook how much demand there was for this.

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[11:00] So, our AI thesis going into 2027 is it's still going strong. you know, I don't I don't see this as a March 2000 type of event. I think there are a lot of differences here where, you know, so I I think the dip we've seen over the past couple of days, you ought to be a buyer of it.

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[9:08] that also could mean that the your growth rates and the revenue that people are expecting might not be as fast as people expect. Might take a little more a little longer to assimilate it and for companies to justify those expenses

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[11:46] if there's a lot of like smaller players and there'll be a lot of other players sort of trying to hold on to the and grab hold of this rocket ship. Uh there will be uh you know, companies that aren't they don't survive.

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[14:12] I do think we're going to see the AI bubble, uh, you know, go south. You see it in certain areas like if you watch Bitcoin and and Mike Saylor at Strategy. He's kind of spiraling down.

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[35:14] I I do think that parts of AI are way ahead of themselves... I think the AI trade is heated. I think parts of it are bubbly and like like SpaceX.

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[29:24] I do feel like the AI stocks are extremely overheated right now and, you know, they're going to have a hard time living up to the immediate expectations that they're going to generate enormous cash flow.

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[2:28] What about AI? I said, AI is a bubble.

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[21:59] I'm actually pretty bullish on the AI sector um right now. And I still think that there's some room for those stocks to run.

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[28:34] Almost all of them, not counting Nvidia, but all the hyperscalers are now flat to negative cash flow, meaning they have they're if they want to keep spending the way they are, they need to borrow money. And we've seen them all do big fixed bond deals now, they're all coming to the equity market.

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[16:54] I think that the the the AI bubble and uh is is is about to burst here. I think that um the the the this parabolic rise in the semiconductors over the last basically 12 months is not healthy anymore. It's dangerous. We have seen the first cracks now last week.

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[22:45] we're seeing the same five things. explosive capex spending, sky-high valuations, market concentration amongst players, speculative fever, FOMO investing, and then the fifth is uncertainty in terms of the earnings delivery and the potential overbuild... I think it will be a shock to the market if all of a sudden we realize this isn't developing the valuations of some of these high-flyers which is pretty concentrated would have their wings clipped fairly substantially.

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[4:35] we're we're in the danger zone here in the next couple months. So the AI bubble we believe is going to burst.

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[12:10] the nine people that created AI were named the time person of the year around December 27th just passed and guess what's ready to happen to them? The same thing that happened to Bezos stock. Now was Bezos hugely successful? Yes. Did anybody that buy it before it and own it while it went down 85% did any of them stick around? The answer is no.

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[7:31] for right now, these things are, you know, probably going to be longer gold, longer government bonds, longer emerging markets, you know, and less long US AI stocks and semiconductors at this point.

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[10:14] We're not bearish on this on the space. uh we just think there's going to be a better opportunity to buy it in the summer or in the fall uh buy the AI trade. We're probably in the fourth or fifth inning of what will be a nine inning to overtime innings game.

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[19:10] I I'll mention to you that, you know, I I definitely think we're in a bubble. Doesn't mean it's going to break for for AI uh in the next 6 months, but it will break. And when it breaks, it'll be it'll be pretty catastrophic for the sector.

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[21:30] I think this continues to be perhaps the biggest misallocation of uh capital in the history of the world. Right now, the market doesn't care about it broadly speaking... the MAG 7's done well the last few weeks, but prior to that, it did poorly for 5 6 months. It made up that underperformance in a relatively short period of time. And I think we're soon going back to that.

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[15:16] It's almost inconceivable that there won't be a major pullback. Maybe that's not six Maybe that's six months from now. Maybe it's a year. Maybe it's a year and a half, but it will occur. Please be careful.

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[19:44] Yes, it's going to be deflationary, but definitely not in the short term. We still have huge capex. The capital of co the cost of capital with the capex deployment is very high. The demand for skilled labor associated with the deployment of capital and the buildout of infrastructure is demand, you know, is creating a huge demand on that limited talented skill set.

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[19:00] So I I I I believe that we are uh looking at a time of speculate excess that will give way to uh remorse and ironically enough uh the vindication of the u of the optimists who foresaw what will turn out to be a step forward and in u in uh human condition thanks to these inventions.

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[35:50] technology, AI, be very careful where you invest. They've gone up substantially and they are the ones who can be vulnerable to a decline.

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[18:47] all these glamour indust is is I've called it magic in the past. It's amazing what AI is the greatest thing since the industrial revolution. But we had other glamour sectors before 1920s for example anything related to flight airplanes airlines etc. the stock shot up. Okay. So uh it was basically straight line up and then came the crash and then from 1929 to 1932 airline sector went down 87%.

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[26:31] I don't think data center spending is going to continue at the radio ones

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[6:12] you're going to have big capex for 26 and 27 for sure and I think the reason Nvidia is so cheap is that people are like yeah but then it's going roll over um in and 28 and we just we just think this trend is so big. We just think that's very implausible. Um so we think these lines continue to go up.

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[29:25] Absolutely. Um and I think it's already starting to happen... that's going to eventually lead to I believe billion-dollar companies with one person. Um where certain people will be able to build a large product very fast that people want um and be able to kind of fulfill a niche to a million or a billion dollar valuation. So I definitely think it's going to be possible and we'll probably see more of that very soon.

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[34:16] China is going to take the lead in AI and these American companies that they've overinvested in are going to go bust. Not all of them, but many of them. And that's going to crash the markets even more.

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[6:34] I think it's going to be about 670 close to 700 billion from the hyperscalers in 2026 capex. So that's almost like it's approaching 2 and a.5% of GDP.

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[30:50] So there's going to be this giant buildout, $150 trillion dollars worth of buildout spread over however many two or three years.

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[3:44] I do think that the AI tech trade is exhausting itself. I think the bell is ringing here and Oracle is the one that rang the bell not with their last quarter when the stock fell sharply but after the spike in the previous quarter in the stock and that come down that was the bell ringing when it gave back all of those gains

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[0:02] We are going to have a huge huge problem meeting the needs of the expectations that the market has built in these AI stocks. And the moment when people realize it's not happening or certainly close, that's when it will cave.

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[26:52] I think the second half of the year is probably going to be a very good one... the whole game here as many people know um is the AI game right if you are looking to be long things that's the place to be long things that benefit from AI

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