Kevin Xu
Founder of AfterHour, CEO of Alpha
US equities look super bullish on the prospect of faster economic growth. Elon Musk says US GDP will grow 'far beyond' 4% per year. x.comÂ
AI stocks should rise because there will be no AI slowdown in the US-China race. President Trump said the US leads China in AI and wants to keep it that way, "because whoever wins AI, wins." That supports Alphabet, Nvidia, Amazon, Applied Materials and Corning. x.comÂ
Expensive borrowing makes debt-funded AI projects harder to justify, pressuring AI stocks and the S&P 500. Inflation keeps pressure on rates. If Republicans lose Congress after the midterms, Trump could rely on executive action to speed permits, power projects and existing funding programs, keeping AI investment moving despite expensive money. Tech and risk assets could catch a bid if earnings hold and bond yields settle; Fed cuts remain uncertain. x.comÂ
US large-cap equities should keep rising because tailwinds far outweigh headwinds, making any dip a buy. Endless money printing inevitably flows into equities, the AI revolution is arriving with robotics close behind, and S&P companies are reporting surging earnings beats. The AI and robotics revolution isn't remotely priced in, as labor costs trend toward zero while corporate profits keep rising. Elliott wave calls for a historic top miss this broader picture. x.comÂ
US stocks' fear over AI labs pacing themselves is nonsense, because demand and supply constraints for the AI buildout have not changed. Every layer of the buildout was signaling the same thing before the weekend's essay. Some caution is warranted, but the doomsday reaction was already fading as markets recovered from a brutal premarket and open. x.com x.comÂ
US stocks face a potentially bigger selloff as rising inflation compounds concerns about AI spending. PCE inflation reached a four-month high of 3.6%, increasing pressure on the Fed to raise rates; Alphabet shares fell after disappointing earnings, slowing ad growth and more than $51 billion of quarterly capital investment. x.comÂ
US large caps and the strongest AI names can rip higher after the Fed's rate hike pushed stocks down to critical support. If SPY holds above the mid-750s this week, it could rise above 765 over the next couple of weeks, implying 15-25%+ gains in AI stocks such as Marvell, Bloom Energy, Nebius, Intel, Nvidia, AMD, Dell, HPE and Qualcomm. Tech names Meta, Alphabet, Apple and Microsoft also look bullish as rotations continue. x.comÂ
SPY's current pullback looks brief because whale accumulation remains above the level associated with mid-term trend continuation. The reading is 87.74%; it fell below 80% before both recent major crashes. Barring a black-swan event or major unexpected fundamental shift, this decline looks closer to earlier minor corrections. The stock market still has significant upside, and fear-driven discounts remain opportunities. x.com x.comÂ
Uncertain AI-capex profits and higher oil costs from Iran still threaten US stocks. The SPCX-Nvidia deal brought much-needed overnight inflows to chips and is shifting sentiment, but tech's waterfall decline will not heal with a sharp V-bottom. Be prepared for a big fade. x.comÂ
US large-cap equities stay a buy because an uninterrupted AI narrative is strong enough to overcome adverse macro developments. Core inflation in the high 2s or low 3s is not a big risk; stocks, the Fed and a sideways 10-year yield show little concern. As long as AI capex is not slowing, macro remains a dominated risk. A pullback is overdue, but its likelier catalyst is AI-related, such as a megacap like Meta cutting capex or open models reviving ROI questions, which would change the view. x.com … Show more