원문 보기
WisdomTree Chief Economist Jeremy Siegel. Professor, welcome back. I described everything correctly, did n't I? So you continue to be impressed by the dynamics of profits, right? Yes, impressed by the earnings dynamics and constant good news. You know, last Friday when we were chatting, we were talking about, well, situational awareness, what would you call it?
Not a crash, but a liquidity event, and it didn't really shake the market. This, I mean, was a cleansing event. And I think it gave people confidence. There is some leverage there , but it is not excessive. And the CPI and PPI report today this week is actually quite good. Goldman Sachs, who best analyze all the details of the impact on the PCE deflator coming out at the end of the month, lowered their estimate of what the PCE will be like for both the CPI and PPI.
They say it will only go up 2/10ths of a percent , and half of that, 1/10th of a percent, is crazy portfolio management , the price index section, which is mostly driven by the stock market's rise, and that's certainly not a bad thing. So what we got this week in terms of real data—of course, there's retail sales tomorrow—but on the pricing side , I have a hunch: If oil stays in the $80-something range, I don't see any reason for the Fed to raise rates in September, and the earnings parade continues.
Yes, it looks like we can cross out the raise for September. I asked a question at the very beginning of the program, Professor, and I would like to hear your answer. Are investors overly optimistic for various reasons? They have reason to be optimistic, but some say, "Maybe this is an income bubble, and this is its peak ." And for other reasons too.
Or are we not optimistic enough because we actually have more resilience in the earnings story than we think, along with other issues such as lower inflation and the future Fed interest rate cuts rather than increases? And productivity, which , as you know, lagged in the first two quarters of this year, but looks like it could pick up significantly in the third and fourth quarters .
I mean, you know, AI is really starting to come into play , you know? And AI is not only driving revenue growth through hyperscalers and infrastructure spending, but also , as we've said many times, companies are using it to cut their own costs to increase margins, which have been, you know, pretty stagnant for the non-tech sector.
If you look historically, overall, and as you noted at the beginning of the program, margins overall at S&P are at historic highs. But if you exclude the technology and communications sector, it remained relatively stable. However, it could be significantly improved if they could use AI for what it was designed to do, which is to reduce costs.
So, I think this is where the story can continue, regardless of what happens to this AI. I'm not going to speculate on whether he'll be a bit overrated or what the competition will be like. God, you know, despite any setbacks, the stories are always overshadowed by the real results and profits. I don't think we're overly optimistic at the moment.
What do you like most about the market right now? What do you find most attractive ? If you were to evaluate the market solely on price/ earnings, some sector, something that you think is underserved , that we're not focusing on enough because technology is, quite rightly, sucking all the oxygen out of the room— maybe that's your choice.
You tell me. Well, you know, I... was there...there's a rotation. which has taken place over the last 6 months: from so-called growth stocks to value stocks. And I think the day we had that liquidity event, some call it "Leopold Low" after the banker Leopold von Ascher, when he had to sell off most of his position.
It was an extraordinary, you know, shock to the market. We've really recovered from that now. But if you look at the broader trend, this rotation is still ongoing . This doesn't mean that, you know, the G7 , hyperscalers, and technology are going to give up . But as I said, when I look at potential earnings that haven't yet been factored in in the future, I like stocks with a P/ E of 15 that will potentially benefit from AI.
There are many companies —and Anthropic is one of them— in almost every industry that could benefit significantly from AI, but they are still not using it. And, you know, I won't name specific names, but I think this rotation could continue in the future. By the way , both groups of stocks can grow, but we see how some of those undervalued stocks can rise relative to the leaders of the last two to three years.
Nvidia is approaching a major earnings report, and this time the question is n't just whether the company can beat expectations. The more important question is whether the market believes its growth story can continue at the same pace. Wall Street is expecting another strong quarter, with revenue of about $92 billion , almost double what Nvidia reported a year ago.
Revenues are also expected to nearly double. Demand from hyperscalers remains extremely high, so the numbers themselves may not be the biggest surprise . Instead, investors will likely focus on Nvidia's competition, margins, and financial performance. The issue of competition is becoming increasingly important as Nvidia started with a dominant share of the AI accelerator market.
As competitors like Google, AMD, Broadcom, and others develop their own alternative solutions, some loss of market share is almost inevitable. The real question is how quickly this will happen and whether Nvidia's full hardware and software stack can retain customers. Then a new question of financing arises .
Nvidia uses its balance sheet to support parts of the AI ecosystem, especially smaller AI companies and infrastructure providers. The concern is n't necessarily that this makes up a huge chunk of Nvidia's current revenue. The more important question is whether the demand being created today will be able to exist on its own over time without Nvidia's financial support.
This makes the upcoming earnings call especially important. Investors will want more clarity on how these funding mechanisms work, how much risk Nvidia is actually taking on, and whether outside capital is increasingly joining Nvidia. But there's another reason I'm keeping a close eye on this earnings report.
Nvidia is entering the next generation of the Blackwell architecture. The market wants to know how quickly this platform can ramp up volumes, what will happen to gross margins due to rising memory and wafer costs, and whether Nvidia can sustain the extraordinary growth rates that investors have become accustomed to.
And this is where expectations get tricky. When a company grows revenue and profits by nearly 100% year over year, a strong quarter seems normal. This is the problem Nvidia faces: the company can show exponential growth, but the stock will still fall if investors don't have enough confidence in the coming years.
However, the long-term history of AI demand remains much broader than today’s hyperscaler spending. In the short term, companies like Microsoft, Amazon, and Google are driving huge infrastructure investments over the next few years. Corporate adoption and access to technology in industries such as banking, healthcare, and manufacturing could be another significant source of demand.
In addition, autonomous vehicles, robotics, etc.— AI infrastructure can expand these capabilities even further. In addition, important changes are also taking place within AI itself . As models become significantly larger and more complex, the amount of computing power required continues to grow.
Comments 0