Valuations in the USA look insane. Surely stock prices must be a bubble? Maybe. Maybe not – the USA has created a self-driving technology machine, a conveyor belt of tech innovation that’s set to continue delivering value and corporate profits. To understand it – ditch traditional thinking about economies.

Tesla’s spectacular rally this week shows why it’s the stock to short if you think Harris will win. As the world becomes less stable, Deftech is the next new thing. But, the adoption of new battlespace tech is being slowed by bureaucracy, Primes and dumb thinking – factors common to every government and business.  

Nvidia is a proxy for the global economy – said an idiot analyst. AI is terribly important because C-Suites think it is. The reality is AI will be messy, expensive and costly to implement. We’ll quickly discover it overpromised and underdelivers. Back to fundamentals.

There was a Judder Moment in AI last night. Microsoft’s numbers confirm the hype is played out - the reality is the AI everything rally is bleeding revenues and momentum. AI could see a cascading failure event bringing down startups, and triggering a reassessment of AI linked firms. Tesla – as the most hollow set of undelivered promises - is set to feel most pain.

Every corporate has its own distinct life-cycle. The Concept and Foundation are stage one. Firms evolve. Bad Management lies at the core of bad companies. Some firms become defined by it. Some firms survive and thrive. Many don’t. Few get second chances.

Discuss in terms of Tesla and Boeing.

The market is distracted by the up, down, shake it all about noise in Tech. Watch banks! The US Fed passed all 31 major US Banks in its annual bank stress test. I can’t think of anything that could scare me more…

Blain’s Morning Porridge June 14th 2024: Musk Promises us Replicants! [...]

There is nothing so dispiriting as dealing with a bank online. The experience will leave you frustrated and furious. Yet we all expect the AI revolution is going to absolutely change tech for the better. Wake up. Smell the Coffee. Prepare to be disappointed.

The markets expect Nvidia will bat it out the park… Unlimited joy and upside awaits! Is the pursuit of AI “maybe’s” overdone? There are plenty of real, positive and profitable investments out there – without the disappointment risk of having backed yet another hollow Tech pipedream.

Today the markets will be focused entirely on Tech earnings and future income expectations. Smart money watches Supply Chains more carefully – and critical to global supply chains is China. While the West is focused on Demand, Asia is thinking about the security of supply.