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.com 

S&P 500 earnings look flattered by AI spending: hundreds of billions in AI capex become immediate revenue for sellers of chips, servers and cloud capacity, while buyers amortize the cost over years. Revenue explodes now and the pain shows up later, so Wall Street raises estimates and stocks get even more expensive. That looks worryingly like a dot-com 2.0, and the risk is what happens when AI spending slows or stops. x.com 

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

Alphabet's AI capex payback is being repriced, making its post-earnings decline more than a one-day mood swing. Guidance and cloud and AI margin commentary are the near-term tests. If growth continues but the multiple compresses, the risk is duration in mega-cap AI, not a collapse in technology growth. x.com 

The S&P 500's concentrated, correlated AI exposure makes a large allocation too risky as rates rise. Higher rates could force data-center bondholders to sell AI equities; early AI use appears to be stagnating and unclear ROI may cap demand even if usage grows linearly. Failed lab IPOs or a credit-driven recession could also undermine the market. AI moving on-device or on-premise is another significant risk to data-center capacity demand. x.com  x.com 

US stocks broadly are undervalued because most of AI's economic value flows to the businesses consuming tokens, not the token producers. AI agents do tasks far more cheaply than human labor, so value creation exceeds value capture by 50:1 or more, lifting aggregate earnings. S&P 500 earnings growth should accelerate beyond historical norms, in step with model labs' revenue. 2026 EPS revisions already outpace the norm, inflecting as Claude Code spread in January, even with CAPE at 42x. x.com  … Show more

Debt-funded AI building is making tech stocks vulnerable to a 25-30% pullback as rates and energy prices rise. AI company borrowing reached $466B this year versus $101B a year earlier; weekly default-insurance trading on seven AI names rose from under $2B in July to over $9B in September. Keep cash for lower prices, though 30% earnings growth and a 19x market multiple argue this is not an AI bubble. x.com 

Inflation and interest-rate fears, not an AI slowdown, are driving the selloff in AI stocks. The market and Fed are reacting wrongly to AI's rapid growth and value creation. Apart from year-end tax-loss harvesting, there is no reason to sell; this should pass and holders should come out stronger than ever. x.com  x.com 

The S&P 500 is not about to top or crash like 2008 because AI is in its early phase, not its late one. AI and robotics will lead the next 5-10 years and replace everyday and service jobs, while AI speeds innovation faster than people can keep up. It is the biggest change in a century, and the next 5-10 years will set the path for the next 100. x.com 

The S&P 500 is unusually vulnerable for the next several years because it is concentrated in richly valued mega-caps forced into an AI arms race. They are committing about $750B to AI in 2026, roughly all their free cash flow, plus equity raises like Google's $85B and about $224B of bonds this year. Much of that becomes a productivity subsidy for the rest of the economy, so active managers can beat the index with smaller firms that benefit without funding it, from suppliers to AI adopters. x.com