AI Supercycle Is Real: Empower’s Norton

Market Valuation & Sentiment - Relief rallies are possible, but current valuations are not particularly attractive after some froth has been taken off [1] - Doubts about AI's impact on the broader economy and questions about depreciation may lead to continued market volatility [2] - NVIDIA's report is a capstone event and a macro indicator, potentially causing market swings of up to 7% [6] NVIDIA's Performance & AI Supercycle - NVIDIA is trading at approximately 30 times future earnings, which is not considered highly elevated by some [3] - The AI supercycle is believed to be real and will profoundly impact the economy, but a full range of outcomes must be considered when pricing AI stocks [4][5][10] - The key question for 2026 and 2027 is whether the conviction remains to build out the massive infrastructure needed for AI [9][10] AI Adoption & Impact - Only 10% of surveyed companies are currently using generative AI for revenue or new product generation [11] - AI adoption is accelerating faster than previous technology cycles like the internet [12] - Commentary around AI is still generic, lacking specifics on how it's transforming businesses [12] - Real-world AI applications and their impact on earnings, beyond hyperscalers, are key indicators to watch [13]