AI Fundamentals

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Aliaga: We are in a capital spending boom, bigger than the Apollo program
CNBC Televisionยท 2025-08-27 11:55
AI Theme & Market Focus - The market is heavily focused on whether mega-cap tech companies, particularly AI superstars, can exceed high expectations, with investors demanding "straight A pluses" [2][3] - The AI theme's ability to continue powering ahead regardless of economic slowdown or political factors is being questioned [8] - The focus is shifting to the return on investment of AI, highlighted by debates around the GBT5 launch and reports on AI pilot project success [1] Industrial Sector & Capital Spending - The industrial sector is gaining attention as a beneficiary of the significant capital spending boom related to AI infrastructure buildout [4][5] - Capital spending related to AI infrastructure surpasses the Apollo space program, with companies spending over $250 billion (inflation-adjusted) annually [5] - Industrials, including energy transmission, data center cooling, and related equipment, are poised for further growth as investors diversify exposure beyond mega-caps [6] Market Leadership & Risk - Strong tech fundamentals could lead to a shift in market leadership back to tech [9] - Investors are seeking quality and defensiveness amid economic and political risks [8] - Currency and bond markets pose a risk to equity markets, reflected in the steepening yield curve and a lower dollar [11][12] Nvidia Expectations - Very high revenue growth expectations for Nvidia, with estimates of 53% year-over-year increase [3]