Yes I think valuations are too high! Pullback is normal as investors take profit. Will this be a long pull or just a breather ? That is the million dollar question. S&P is just off at all time high.
I believe it's buoyed by the AI run from Nvidia to Oracle to Palantir. How long will the AI run go on? Tesla is coming off a big bear run and buoyed by renewed good news on the car delivery front. Or did the make up with Trump have anything to do with it ? Perhaps new products from Tesla will push it higher. How what about the rest?
Has AI run its course like the Internet boom that crashed spectacularly in 2000/01? Looking at big tech it's more software driven now than the hardware run in 2000. Once the prized possession like Gpu/cpu become mainstream or easily attainable that will drive margins and level the playing field. How long before AMD/Arm catch up or will they ever ? Hardware aggregators will still have a role to play as do Data Center operators like Equinix.
Then comes the software players which have become niches in their own right. Palantir, C3.ai are some examples. Google, MSFT, ORCL have roled out consumer AI software, how much have that contributed to the bottom line ? I am not sure that investment is bearing fruit right now but more of a keeping up with the joneses. Big tech always is. once area that will continue to grow and one of the most important is Cyber security. Can't live without it but most importantly organisations have to realise it's a most critical component in all IT departments. Software alone can only do so much and you cannot rely on cyber security software and design alone. There Must be plan B when an attack is successful to keep the business running. Something to take note.
How about traditional business ? Traditional Banks have been fighting a battle with digital banks and crypto for a few years now. Most have been cutting back on bricks and mortar for the past few years. I believe digital is the future but we cannot get rid of the traditional banks just yet and they are digitising to keep up. I see some M&A for banks especially the smaller capitalised ones. Trump has been advocating crypto but is it just for a quick buck for some?
Nuclear has made a surprising come back recently. I belief it's the way to go as it's the most stable generator of electricity as demand for electricity is at an all time high. May not be renewable but cheap in the long run. Watch Landman and hear what Billy Bob Thornton has to say about renewables. Makes a lot of sense.
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