Trivariate's Adam Parker: Growth & core PMs likely to hold significant chip exposure for years

Market Trends & Expectations - Investors are anticipating Nvidia's earnings report, noting high short interest since June [1] - Expectations for IPOs are high in the coming weeks [2] - Institutional investors are expected to return next week to gather Q3 data points at industry conferences [3] - A potential 10-15% dip in high-quality US equities could be a buying opportunity [4] - Retail sector is at a 52-week high, indicating consumer spending is not declining sharply [6] AI & Productivity - AI investment is expected to drive productivity gains for large companies, with benefits anticipated in late 2026 and 2027 [9][10] - Growth stocks, particularly in AI, semiconductors, compute infrastructure, and life sciences, are expected to remain attractive investments [12] - Margin expansion is probable due to AI infrastructure investments [15] Monetary Policy & Economic Outlook - The market is considering the possibility of a more accommodative Federal Reserve policy [15] - Running below 2% inflation for a long time would be fine [16] - The S&P 500 is considered a superior asset class due to its managed nature, with underperforming companies being replaced [13][14] Investment Strategy - A significant portion (77%) of the mega-cap universe market cap is attributed to growth stocks, with only 3% to value stocks [10] - It is difficult to be bearish on US equities if margins are close [12] - Shorting US equities is not advisable if margins are expected to increase due to AI and the Fed is not a problem [17]