Schwartz: A lot of the narrative around tech stocks right now is capex

Market Dynamics - Recent fluctuations in tech stocks indicate a rotation out of and back into the sector, suggesting investor sentiment is sensitive to valuation concerns and concentration risks [1] - The quick rebound in tech stocks is attributed to increased capital expenditures, particularly from companies like Meta and Nvidia, which are seen as beneficiaries of this spending [2][5] Capital Expenditures and Earnings - Meta's larger-than-expected capital expenditures have raised questions about whether such spending will translate into real profits, with Nvidia positioned as a key winner in this scenario [2][5] - The earnings season has shown a positive trend, with 77% of companies beating earnings expectations, which is above the historical median of 72% [8] AI and Profit Margins - The integration of AI technology is expected to drive improvements in profit margins across various companies, with early adopters already seeing significant benefits [3][4] - Companies like CH Robinson are utilizing AI to reduce headcount and expand margins, indicating a broader trend in the industry [4] Global Market Insights - The Japanese market, represented by the Wisdom Tree Japan Opportunities ETF (OPJ), is viewed as an attractive investment due to lower valuations compared to the US market, despite recent underperformance [11][12] - Japan's corporate governance and fiscal policies under the new prime minister are expected to support further growth, making it a top investment idea [12][13]