May be still young in AI revolution lifecycle, says SoFi's Liz Thomas

Market Analysis & Strategy - The market is drawing comparisons to the 1990s, prompting questions about the remaining duration of the current market cycle [1] - The market exhibits excitement regarding the AI revolution, suggesting potential for further growth in its lifecycle [2] - Expect minor periods of "breakdown in beta," characterized by momentum reversal in high-risk names [3] - Unprofitable tech companies have seen a significant surge (21% increase since the end of July), indicative of speculation and increased risk appetite among investors [4] - Risk appetite should align with individual portfolio needs, irrespective of market rallies [5] - Froth is expected to persist in popular sectors like tech and communications [6] - Market rallies will likely experience periods of correction, potentially triggered by events like end-of-quarter rebalancing [7] - Redistribution of assets should be monitored to determine if capital remains within equities or exits the market entirely [8] Valuation & Earnings - The Fed chair's comment on stocks being "fairly highly valued" is reminiscent of Greenspan's "irrational exuberance" remark [8] - While stocks are richly valued (95th percentile for the S&P), strong earnings growth could mitigate multiple expansion concerns [9][10] - Earnings growth is preferred over multiple expansion, as the latter is often the first to decline during beta breakdowns [10][11]