00:00 Speaker A

Will December bring back the return of the bullish trade on AI? What do your charts say?

00:11 Speaker B

Well, I I don’t know if I necessarily see a lot of upside in the AI and I agree with Dana completely. I think this is really when you have to look out whether or not the Fed cuts this time, they will, I think in 2026. So it might send a little bit of a nervousness through the market if they don’t. But nonetheless, I think that would be another buy opportunity because it’s inevitable just like she said. And so as far as AI goes, I think you have to be careful. Excuse me. Where you have to look. And we’re looking more at the software side and the energy side. We’re looking at sort of the infrastructure here rather than the companies themselves that have really been outperforming to this point.

00:54 Speaker A

And as on the positive side here, the AI trade has come back over the past week and a half. I mean, we had that reversal with Nvidia reported a few weeks ago. That spooked everyone out, but things have stabilized a bit and I think that’s good.

01:17 Dana

Yeah, the AI trade uh has come back. We’ve also seen the sort of impact on productivity when you talk about AI tools, um and also with Alphabet. I mean, Alphabet is really been the one that has stood out. I mean, the uh month to date, it’s up more than uh 20%. Uh the TPUs uh chips, which aren’t replacing the GPUs, but it’s a form of diversification uh for uh these hyperscalers. They’re their Gemini tool. I mean, earlier this year, you had Wall Street uh very concerned about perhaps the uh their Google search being impacted. Well, they’re integrating that into the tools. And also one other note, I mean, I was listening to also Lynn Alden, a macro strategist who’s talking about how AI is being used so much for videos. And guess who’s got a massive video platform? Alphabet as well. So, certainly, I think that it infused sort of more optimism, even more optimism despite the fact that you’re talking about, oh, is there a bubble in AI? Well, you look at Alphabet and its performance this month and it has really uh roared.

01:58 Speaker A

Yeah, Dana, uh absolutely. I mean, Alphabet is uh certainly roared. Is that the new Canary in the coal mine AI stock? We’ve seen different companies take this crown throughout the year. Nvidia, of course, has led the AI way, but Oracle gained uh a little bit of a a market leadership position when it came out with its giant backlog in September. Is it now Alphabet’s moment?

02:22 Dana

You know, it’s an interesting question because what I’ve been waiting for in this trade is when is the, when is the driving stock, if you will, going to be one that actually shows productivity increases from AI, right? So we can we can talk about, right? Certainly profits are there. But, you know, to a certain extent we know that we haven’t seen the productivity gains from AI filter into, you know, kind of these different companies. and if a company like Google comes out and says, you know, we’ve been able to do XYZ, our productivity is increased this much, you know, our efficiency, we expect this, this, and they really show, you know, hard numbers kind of around that, then I think sure, that that could be a telling, uh, you know, kind of bell weather. And I don’t think, you know, AI is going to filter out through our economy in all sorts of ways. There will be winners, there will be losers. We don’t really know yet, but I do think the market is kind of searching for that, hey, we actually think we’ve cracked the code here on how to use this as opposed to, you know, great, we just got another contract for, uh, you know, the the infrastructure for AI. I also agree with the comment on energy. I think to the extent that we know that the CAPEX is not going anywhere. Uh, every, you know, you just talk to folks in real estate, right? It’s all data centers, right? It’s all that that’s that’s where all the dollars are going. That’s where the deals are. So I do think um as a secular trend as well, energy is kind of necessary. Just, you know, population growth, uh people hopefully getting better standards of living over time. I think that’s a place to be. But as far as the AI bellwether itself, I’m looking for one who actually comes out and has, you know, kind of the benefits of AI.