Most stock risk is tied up with the large capex spenders, says KAR's Julie Biel

Core Viewpoint - The discussion highlights the potential benefits and risks associated with capital expenditure (capex) spending by major companies, particularly in the context of generative AI and small-cap businesses. Group 1: Capital Expenditure and Risks - There is significant risk associated with companies relying on a few major clients for capex spending, raising concerns about customer concentration risk [2] - The expectation that companies providing the "picks and shovels" for capex will benefit may not hold true due to the reliance on a limited number of boards of directors making bold investment decisions [2] Group 2: Generative AI and Small-Cap Opportunities - Companies already utilizing generative AI in their operations, particularly in the small-cap software sector, are seen as having a competitive advantage [3] - Specific small-cap companies mentioned include Daycart, which has a significant market share in package shipping, and Encino, which helps small banks compete with larger institutions [4][5] Group 3: Market Sentiment and Technology Transition - There is a belief that the current technological transformation, particularly in AI, is real and will have lasting impacts over the next decade, distinguishing it from past tech trends like crypto [7] - However, there are concerns about potential overinvestment in technology, which may not yield immediate returns for investors, drawing parallels to the aviation industry [8][9] Group 4: Earnings Expectations and Supply Chain Resilience - Optimism exists regarding Q3 earnings, with companies demonstrating resilience amid uncertainty and supply chain challenges [10] - The integration of cost structure changes in response to tariffs will be critical for companies in the upcoming quarters, with the impact on consumers still uncertain [11]