How to Add Us to Google News Sending You to Google News in 3 © SDI Productions / E+ via Getty Images Skip to content S&P 500 6,818.20 -0.01% Dow Jones 47,274.60 -0.08% Nasdaq 100 25,373.60 +0.03% Russell 2000 2,475.97 +0.05% FTSE 100 9,690.40 -0.25% Nikkei 225 49,465.00 -0.03% Investing Two Sector ETFs Are Quietly Outperforming the S&P 500 Without a Single AI Stock Quick Read ByJohn Seetoo Just now This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation ...

Core Insights - Mark Cuban draws parallels between the current AI competition and the 1990s search-engine boom, suggesting a potential outcome of a single dominant player in the market [1][2] Group 1: AI Competition Landscape - Multiple companies are striving to create the ultimate foundational AI model, similar to the early search engine days where Google became the leader [2] - The current AI race may lead to a winner-takes-all scenario, with major players like Alphabet Inc.'s Google, Meta Platforms Inc., and OpenAI heavily investing resources [3] Group 2: Economic Concerns - Cuban expresses concerns about a potential bubble forming due to overspending by major AI players, a sentiment shared by other tech leaders [3] - The infrastructure supporting AI, particularly costly data centers, raises concerns about future technological advancements potentially rendering current investments obsolete [4] Group 3: Future of AI and Leadership - Emphasizing the importance of AI skills for future leaders, Cuban suggests that students embracing AI will be better equipped for the workforce [5] - Job seekers are advised to target smaller companies for AI roles, where such skills are increasingly valuable due to limited IT resources [5] Group 4: Wealth Creation Potential - Cuban predicts that AI could create the world's first trillionaire, highlighting its transformative potential in reshaping industries and generating unprecedented wealth [6] Group 5: Business Implications - The critical role of AI in modern business is underscored, where leveraging AI for faster and smarter decision-making is becoming essential for competitiveness [7]

Group 1 - The stock market may be experiencing an AI-fueled bubble, with major indices fluctuating between euphoria and anxiety as tech giants invest heavily in AI data centers while accumulating debt through complex strategies like special purpose vehicles (SPVs) [1][2] - OpenAI is entering long-term agreements for substantial AI infrastructure despite lacking the financial resources to cover these commitments, with analysts estimating a need for $207 billion in new financing by 2030 [2] - The Shiller CAPE ratio, a measure of market valuation, is approaching levels seen during the dot-com bubble, currently just under 40 compared to a historical average of around 17, indicating heightened market exuberance [7][8] Group 2 - The Shiller CAPE ratio smooths out earnings fluctuations over a decade, providing a more stable view of market valuation compared to single-year earnings metrics [6] - The current Shiller CAPE ratio is nearing the peak of the dot-com bubble, which raises concerns about potential overvaluation in the market [7]

Core Insights - The article compares the performance of an All-Weather Portfolio with the S&P 500, highlighting the potential for better returns through diversified investment strategies [1]. Group 1: Portfolio Performance - The All-Weather Portfolio has achieved a 75% year-to-date return in 2025, indicating strong performance compared to traditional market indices [3]. - The S&P 500 serves as a benchmark for evaluating the effectiveness of various investment strategies, with the All-Weather Portfolio positioned as a more resilient option in fluctuating market conditions [1]. Group 2: Investment Strategies - The Financial Prophet promotes a Covered Call Dividend Plan, suggesting that investors can earn up to 50% on certain investments, which may enhance overall portfolio returns [3]. - The Daily Prophet Report is presented as a valuable resource for investors, providing timely information to make informed decisions before market openings [3].

Economic Disparity - An increasing gap in the economy is noted, where wealthy households drive most economic activity while low-income Americans struggle financially [1][3] - The top 20% of earners in the U.S. account for nearly two-thirds of all spending, a record high, while the bottom 80% have seen their share of spending decrease from 42% to 37% since before the pandemic [3] Impact of Stock Market - A potential stock market downturn could significantly affect wealthier households, which are described as the "last pillars" of strength in the economy, potentially leading to a recession [2][4] - The richest 20% of U.S. households own approximately 93% of all stocks, indicating their substantial influence on economic growth [5] Role of AI Stocks - The soaring stock prices of artificial intelligence companies are crucial for the economy, as spending by affluent Americans, driven by their increasing stock portfolios, is a major growth driver [5]

Group 1 - Microsoft (MSFT) stock has rebounded amid a four-day winning streak, following a pullback to its 200-day moving average, leaving the stock 16% from its all-time high [1] - Shares of Microsoft fell in November due to a stock market sell-off driven by valuation concerns for high-tech stocks [1] - The release of a new open-source AI model by China's DeepSeek has impacted Nvidia stock, which sold off in early 2025 [2] Group 2 - The article discusses the volatility of AI stocks, highlighting how companies like Amazon, Google, Oracle, Microsoft, and Meta have experienced significant fluctuations [4] - There is a growing concern about an AI bubble, with Wall Street weighing the risks associated with AI stocks, particularly in relation to Google's competitive position [4] - The stock market is currently in a rally mode, with notable performances from major indices and companies like Tesla, indicating a potential recovery [4]

Core Viewpoint - There is increasing concern among investors about a potential AI bubble, drawing comparisons to the internet bubble of 2000 [1][2]. Group 1: Market Sentiment - Investors holding AI-related stocks and ETFs, such as Invesco QQQ Trust (QQQ) and Invesco NASDAQ 100 ETF (QQQM), are feeling uneasy due to bubble discussions [2]. - Despite bubble concerns, many market observers believe that AI investing is not necessarily in bubble territory [2]. Group 2: Performance of ETFs - QQQ and QQQM are currently experiencing multiyear bull markets, largely due to significant investments in leading AI companies, particularly the "Magnificent Seven" [3]. - The current era of AI enthusiasm is fundamentally different from the internet bubble, as leading cloud service providers have strong balance sheets and positive cash flow [4][5]. Group 3: Investment Dynamics - The leading cloud service providers have self-funded their AI capital expenditures primarily through operating cash flows, contrasting with the debt-funded investments during the late 1990s internet bubble [5]. - There is a significant runway for AI adoption, with agentic and physical AI expected to be future growth drivers [5][6]. Group 4: Valuation and Future Outlook - Current valuations of AI stocks appear attractive compared to internet stocks from 25 years ago, suggesting that the AI theme is not yet in bubble territory [6]. - BNP Paribas believes that while expectations for AI leaders are high, valuations remain reasonable, and they are monitoring potential risk factors such as industry consolidation and disruption [7].

AI Bubble Concerns & Sustainability - The report focuses on concerns about a potential bubble in the global AI industry, fueled by multibillion-dollar circular deals [1][3] - Questions arise regarding the sustainability of AI spending by Asia's tech players [2] - Nervousness persists despite efforts to downplay criticism, particularly concerning revenue justification for the AI revolution by 2030 [3][6] - Concerns exist about suppliers funding customers, customers investing in suppliers, and murky revenue-sharing agreements [4] - Some skeptics warn of an overdue correction, while others remain confident in AI's long-term potential, suggesting a bubble has merely gotten ahead of itself [10] Key Players & Strategies - NVIDIA is central, described as selling the "troubles" in today's AI job rush, engaging in mega-deals to invest in companies that buy its products [5] - SoftBank's AI exposure is examined, including its investments in OpenAI and massive data hubs, raising investor fears of potential backfire due to rising debt [16][17] - Foxconn's chairman addresses concerns about circular deals, emphasizing the potential for AI in manufacturing and daily uses, highlighting the demands are real [11][12] - Alibaba's CEO doesn't foresee an AI bubble forming in the next 2-3 years, believing resources for AI won't meet demand [36][37] Financial Implications & Market Dynamics - SoftBank sold its entire stake in NVIDIA for $58 billion to bankroll AI ambitions, amplifying market anxiety over an industry bubble [7] - Bloomberg Economics sees demand for Korean chips surging by 35% next year, almost twice the current clip [8] - Oracle's stock performance is noted, giving up gains made since striking a $300 billion deal with OpenAI, suggesting investors are penalizing the shift to AI [23] - OpenAI is committing over $13 trillion in the next few years, raising questions about the source of funding [27]

Core Insights - AI stocks have experienced significant volatility in 2023, raising concerns among investors about the potential impact on home values if the AI bubble bursts [1] - Michael Burry has expressed concerns regarding the overvaluation of major tech companies, drawing parallels to his predictions before the 2008 housing market crash [2] - Homeownership remains a primary source of wealth for Americans, with an estimated 86.2 million homeowners in Q2 2025 and a median net worth of $369,200 [3] Homeownership and Wealth - The median net worth of renter households is significantly lower at $10,400, highlighting the wealth disparity between homeowners and renters [4] - Approximately 62% of Americans own stocks, but stock ownership is concentrated among higher-income households, with 90% of households earning over $100,000 owning stocks compared to only 28% of those earning below $50,000 [5] - For many families, home equity represents their most significant source of wealth [6] Economic Outlook - Economists suggest that homeowners today are in a stronger position compared to the Great Recession, indicating that the housing market is well-positioned to withstand potential corrections without leading to a crisis [7]

Core Viewpoint - Nvidia's stock has declined 16% from its peak two months ago despite strong earnings, raising concerns about an AI bubble and the sustainability of its earnings [1][4][6]. Group 1: AI Bubble Concerns - There are growing investor concerns regarding the potential existence of an AI bubble, with high valuations in AI stocks and significant capital expenditures required to maintain these valuations [3][4]. - The narrative around AI is shifting from a broad trend benefiting all companies to a more competitive landscape, particularly between Nvidia and Google [7][10]. Group 2: Nvidia's Competitive Position - Nvidia's earnings sustainability is under scrutiny, especially regarding its financing relationships with hyperscaler clients [6][7]. - Google is emerging as a significant competitor, leveraging its data center advantages and computational power, which could threaten Nvidia's market share [8][9]. Group 3: Investor Sentiment and Actions - Notable investors like Peter Thiel have exited their positions in Nvidia, prompting questions about the company's future and contributing to recent selling pressure [11][12]. - The recent shift in sentiment has led to profit-taking among investors, particularly as the year-end approaches and concerns about AI and cryptocurrency markets grow [5][6][13]. Group 4: IPO Market Impact - The downturn in AI sentiment, coupled with challenges in the cryptocurrency market, is negatively affecting the IPO landscape, which had been driven by these two themes [13][14]. - Companies in the cryptocurrency space are facing difficulties in launching IPOs due to recent market volatility, which may shift investor focus back to traditional industries with stable revenue growth [15].