Market concentration is scary and it's all around AI, says AB's Jim Tierney

Market Concentration & AI - The market is concentrated around AI, with the top two and top 10 stocks at all-time records, which is considered scary [2] - Companies with earnings growth, particularly those related to AI, are driving the concentrated market [2][3] - Nvidia benefits from hyperscalers raising their capex expectations, and Microsoft benefits from AI spending driving Azure growth and cost reduction, with headcount down year-over-year while growing at 15% [4][5] - The return on AI is now visible, with Microsoft as a prime example [7] Tariffs & Inflation - Tariffs initially crushed the market, leading to a 20% loss in days, but the market has recovered [7][8] - Tariffs have been pushed out and inventory has been built, mitigating the immediate impact [8] - Tariffs are expected to add about 15% to consumer prices, according to a Yale study [9] - While 15% in aggregate may not be a problem, companies heavily affected by tariffs (10-20% cost increase) will face challenges compared to those with pricing power or without tariff issues [10]