We'll stick with the markets, bring in our next guest who's closely watching the risks around a potential AI bubble, bullish instead on opportunities across Europe and Japan. Joining us now is GMO co-head of asset allocation, Ben Inkler. You think there's a bubble happening in the US market, Ben.>> Uh, we're certainly seeing lots of evidence of bubble-like behavior in the AI space. We see the kind of circular uh revenue deals. we see a lot of very uh aggressive price behavior.So, I mean, is the whole thing ...

Our next guest now says she's still trying to figure out, everybody is, the significance of AMD's partnership with Open AI and the implications on the overall artificial intelligence trade. So, let's bring in Karen Feinman, co-founder and CEO of Metropolitan Capital Adviserss, a CNBC contributor and often a fast money mainstay. So, it's great to have you in our HQ facility as opposed to me visiting you guys.I'm glad in your home. Thank you for having me. All right.So, you heard the conversation with Aaron L ...

[Applauso] [Musica] La parola è la chiave con cui comprendiamo il mondo. Ma cosa succede quando la parola non è più solamente qualcosa di legato all'essere umano, ma anche le macchine diventano in grado di comprenderla, conoscerla, anticiparla e migliorarla. Nel 2017 lessi questo libro Homodeus, in cui Arari cercava di fare delle previsioni su quello che sarebbe stato il futuro dell'umanità da lì a 100 anni.E tra tutte le tesi che Arari sosteneva, una in particolare mi mi colpì. Infatti Arari raccontava di ...

Let's go to the markets. We have a mixed picture on this Monday. NASDAQ's the winner.Uh no surprise because obviously what's happening in the tech and the chip space today more specifically. So stocks record high, Bitcoin record high, gold record high. Uh Joe Edardenni raises his price target back to 7,000.He'll be with us on closing bell today, so you can hear directly from him. He says the odds of another meltup are at 30%. Up from 25.He reduced his base case uh for a sustainable bull market, i.e. without ...

AI Bubble Concerns - The market previously showed a significant increase in searches for "AI bubble," peaking in August, but this concern has since decreased substantially [2] - Concerns about an AI bubble have fallen to approximately 20% of their previous level as of September, potentially indicating a fading of fears [3] - The market acknowledges the risk of an AI bubble bursting, as evidenced by high gold prices, similar to pre-burst levels of the dot-com bubble [9][10] AI Investment and Valuation - There are concerns regarding the amount of capital expenditure (capex) in AI and whether it can be recouped within the lifespan of the chips [6] - Concerns exist about private valuations, such as Open AI potentially reaching $500 billion [7] - Current Cape valuations are around 38, compared to a peak of 44 during the dot-com bubble [7] AI Market Dynamics - Large cloud providers are experiencing rapid growth in earnings from AI, funded by free cash flow [8] - The current AI landscape is compared to an intersection with green, red, and orange lights, requiring careful distinction [6] - The AI sector may experience segmented busts, with suppliers potentially fulfilling contracts even if the overall area doesn't yield expected payoffs [5][6] Historical Context - Bubbles inevitably end, and there are often correction points along the way [13] - The NASDAQ experienced nine instances of declines of 10% or more in the four years leading up to the dot-com bubble burst [14] - Exiting the market prematurely during a bubble can result in missing out on potential gains, as illustrated by the dot-com bubble [15]

and Nancy, great day to have you on. I know you've been very constructive on this trade, but just your reaction to see the sheer momentum that we've had since those lows back in April and your outlook for the rest of the year. >> Yeah, thanks so much for having me, Ally.Um, I I think what investors can learn from this experience is you have to actually jump in when it feels the most painful. We were adding to a number of the chip names in April. We were adding to Tesla.uh it wasn't easy to do, but if you be ...

Market Momentum & Investment Strategy - Investors are currently riding market momentum, buying dips and chasing rallies, with FOMO driving active investors [1][2] - The market is not necessarily paying attention to macro fundamentals, as investment theses in companies like Nvidia, Microsoft, and Meta remain largely unaffected by events like government shutdowns [1][2] Financial Concerns & Cash Flow - There are questions regarding the financial viability of certain deals, particularly Oracle's commitments to Open AI, considering Open AI's revenue and cash burn [2][3] - Oracle has borrowed $18 billion in advance, raising concerns about whether the investments will pay back quickly enough [3][4] - The market is valuing price to free cash flow richly, even as hyperscalers spend down their free cash flow to build the future [6] - While current cash flows are strong, there are concerns about whether the ROI on new investments will match the ROI of the core business [7][8] Historical Parallels & Risk - The current situation is reminiscent of the late 90s, with potential risks associated with large commitments that may not pay back quickly enough, similar to companies like Global Crossing and Northern Telecom [4][9] - There are concerns about where the cash flow will come from to sustain the continued build-out of infrastructure and whether the spending is wise and generating sufficient ROI [10]

Government Shutdown Impact - Bond market is expected to react to a government shutdown, potentially leading to increased bond yields due to uncertainty about the Federal Reserve's actions [2] - A prolonged government shutdown could shave approximately 10 basis points off the GDP each week [5] - Historically, markets have shown an average increase of 1% the week before and 4% the week after government shutdowns [6] Market Seasonality and Federal Reserve - Historically, September tends to be a negative month for the S&P 500, but this pattern has not been observed this year, shifting focus to October and the Federal Reserve's actions [7][9] - In years where the market is up 15-20% in the first three quarters, the fourth quarter typically sees returns of around 5-5% [8] - The market is waiting to see what the Federal Reserve actually does in October [9] AI and Technology Stocks - Nvidia is considered a strong player in the AI trade, with potential growth in quantum computing and robotics [11] - The AI trade is still in its early stages, driven by corporate spending on chips to compete for the future [14] - The performance of the Magnificent Seven (Mag7) stocks post-Federal Reserve pause and interest rate cuts is being compared to historical patterns [15]

AI Data Center Investment & Market Sentiment - The market expresses concern that hyperscalers are overspending on data centers, reminiscent of the dot-com era's "if you build it, they will come" mentality [1][3][4] - There's a perception that investments in AI data centers are akin to "lighting money on fire," drawing parallels to the market crash of 2000 [1][2][3][4] - The market questions the financial sustainability of companies like Open AI, particularly regarding its $30 billion annual commitment to Oracle [3] - Despite skepticism, the companies leading the AI data center build-out possess significant expertise and resources [4][5] Hyperscaler Strategies & Competitive Positioning - Each hyperscaler is developing a distinct reputation; Microsoft is focusing on enterprise AI solutions and integrating AI into corporate PCs [6] - Google is successfully integrating AI search results into its existing search platform with Gemini, avoiding cannibalization [7]

Well, that that has been what the administration is trying to do, right. That's why they lifted some of the export controls on chips. >> Well, then they turned around and said, "You're going have to pay a special payment to DC to sell the chips." And and look where we are today.>> Right. >> Right. >> What about the all of the enthusiasm around AI and these these eyepopping deals that get announced nearly every day.Nvidia and Alibaba, Nvidia and Open AI. I mean, are you are you a buyer of all of this optimis ...