The AI Bubble?
As leadership and stock market breadth continue to narrow, the evidence is building that the recent investor rush into stocks labeled as “artificial intelligence” are beginning to enter the manic phase of the cycle. As growth investors, we know the pain that can cause once the cycle turns, and at this point, we believe the prophetic narrative of AI dominance is the equivalent of picking up pennies in front of a bulldozer.
In this week’s market update, we will review how large the top of the market now represents of the S&P 500 and what this may portend for future S&P 500. We will also review the role of gold in a portfolio and the macroeconomic setup for the metal in the coming weeks and months.
Key Takeaways
We think the rush into FAANG stocks increasingly looks like a mania
Economic growth and inflation continue to decelerate
Precious metals and energy appear to be in short supply in the event of a demand shock
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