AI Scare Trade Explained: Nvidia Earnings, Market Rotation & the 2028 AI Shock Thesis

Hello and welcome back to the Market Maker podcast. As ever, I'm joined by Piers Curran to go over some of the main themes of the week, and there's really only been one, and that is the AI scare trade. Piers, you ready for this?

Okay. Feeling very scared.

Well, we'll leave the listeners to decide on whether they should or should not be scared at this point, but This came as I guess the general AI shift from what has been the discussion all the way up to really the recent few weeks, which has been the AI gold rush. And now it flipping to the scare trade, i.e., the selling the disrupted rather than buying the infrastructure. And in the mix, we obviously had NVIDIA's earnings drop as well, right in the midst of this because Looking back in retrospect to the week, it was really the weekend when some key information came out that triggered a lot of these fears. Monday saw the big move, and then we've recovered, as seems to be always the case. But perhaps we could start then with a little bit of what's the scare trade first, I guess, the definition and some of the context. And then I think importantly, some of the winners and losers, because there were some huge moves. But it's also interesting to look at both the bird's eye view and the microscopic view, because there's some different things going on, isn't there?

Yeah, there is. And I want to just step back a sec. This has been going on since October, in my opinion, right? This whole changing of the guard in terms of what stocks are leading when it comes to the S&P moving higher, this whole AI boom. Really, it was in October that phase one, in my opinion, was done and phase two started to be, right, a bit more stock selective rather than just piling into anything that had any kind of, sort of, even no matter how tangential sort of connection to the AI race, just everything going up. Since October, it's been a bit more selective and this is now just another one of those kind of steps along that. Journey. Obviously the media like to jump on it and give it a name and a narrative, and I think it does then blow up to become a bigger thing than really it should be. But look, that's the nature of the kind of behavioral side of markets, right? But yeah, so the AI scare trade is the latest tagline for this ongoing situation. This is like a shoot first, ask questions later rotation.

I was going to say, yeah, when you were trading, I mean, isn't this just like the classic behavioral thing? It kind of reminds me of Deepseek when that happened more recently and the market fell out of bed only to then go, oh yeah, it's just, it's, well, it's not nothing, but it's definitely not the end of days of the incumbents.

No, but what you gotta understand is I think this is often journalists writing about things, market situations when they haven't actually, you know, they themselves, a lot of these journalists of course haven't been, they haven't been traders, they haven't been on the trading floor. I think they don't quite understand that there's real opportunity for fast money hedge funds to make profits from what they anticipate is going to be a behavioral move. They know full well what's happening and they're actually slamming it and they're actually triggering it to become even an even larger behavioral move, right? They know that perhaps it's not fundamentally backed up and justifiable, but that's not the trade. The trade is to trade a fast, large move that is behavioral driven. There's a lot of opportunity there.

You're saying that I need a Mandelson type Epstein character, Epstein character to then broker between the journalists and the— should we not go that far?

No, I think reverse out of that line of thought. Yeah, I just mean it's like from a trader's point of view, it's like thinking, well, okay, I, it's not what you think. It's not what you think. What others think, it's actually what you think, what others think, what others think. You're almost on that kind of third dimension from a sort of behavioral point of view. Then you get these big episodes that are actually being exacerbated and driven by clever, often algorithmic systems that are looking to exploit this exact situation. But look, let, look, so you, you then get the journalist going, oh, shoot first, ask questions later. It's like panic. Ah, quick, let's jump. But I think it's a lot more sophisticated and clever than that in terms of what's happening out there in the marketplace. But you know, there's people talking about how the market's pricing in 5 years of disruption in 5 days. You know, that's ridiculous talk. That is definitely the media overhyping kind of what's going on here.

But look, there were catalysts for this though, right? There was the, we'll get into the report in a moment, but wasn't there the Anthropic Claude Broad Code situation, the co-work, Anthony angle, wasn't that, was this all like a capitulation of different things all coming at the same time?

Not capitulation. It's an ongoing trade that's been happening for weeks and weeks and weeks. And this is just a little accelerated, you know, flurry along that same trend, right? So what are we talking about here? This is where you are getting high margin, labor-intensive industries, all of a sudden the magnifying glass is on them going, hey, hang on a second. These agentic kind of AI products, the likes of which Anthropic are really starting to accelerate their progress on, all of a sudden, maybe these massive companies all of a sudden maybe they're in a lot of trouble. So you've got these agentic AI. Yeah, so Claude, as you mentioned, has really been the kind of disruptor here. There's also a fintech tool that's called Hazel, but really it's targeting intermediaries. So businesses that charge fees for expertise or coordination. So I think like retail, oh sorry, real estate brokers, wealth managers, you know, insurance agents. So there's a lot of sort of what you might call information asymmetry erosion, which sounds like a mouthful, but it's basically AI compressing the gap between what the professional knows and what the client can do for free.

Yeah. So I saw like a lot of the financial advisors and things like that. I guess there's basic parts of what law firms you would traditionally pay for, which can be automated. I saw a lot of those getting slammed.

Yeah. I mean, it's been quite widespread here, right? And I guess that's perhaps one of the things, again, people have been looking at the very widespread nature of this with lots of sectors getting hit at different moments. It's almost like, okay, which sector is it this week that's getting hammered because of this same kind of thesis, right? And I think, you know, this week we had a big move on IBM, for example. So IBM got absolutely crunched, dropped 13% in one day, which was, that was on Monday, right? That's the steepest one-day decline in 25 years. And that's just come about because all of a sudden people have decided that AI can now modernize what's called the legacy COBOL code. Basically threatening a lot of IBM's sort of services moat essentially. So it's disrupting the core sort of advisory business that these massive monster household name companies have been reliant on for decades and even centuries in some cases. So you had like wealth managers got hammered this week really for the first time, like Charles Schwab, for example. You got the real estate company, big one, CBRE, that got hit hard this week. So yeah, it's been pretty brutal and it's, I guess, just people starting to think ahead, given the speed at which these tools are kind of evolving at. That's the kind of thing that's caught most of us by surprise. I say most, not all, definitely the people at the cutting edge of this stuff. I'm not surprised by the speed of evolution at all, but I think the majority and the masses are. And then you start to get sensationalist reporting and you start to get people really starting to project into the future about, wow, well, this is going to, you know, fearmongering. It's going to disrupt white-collar workers. It's, you know, what's the economy look like? In a few years' time. And one side of that story is, well, it's going to be doomsday, right? And it's the end of days for human beings and then being able to contribute in a productive way towards the economy. And if they can't contribute in a productive way towards the economy, well then they're not going to earn any income because no one's going to want to pay them anything. In which case, if they don't have any income, well, they can't spend it and you know, you get this robots take over the world scenario. And that's basically what triggered this sell-off.

Cause we'll get into the Citrini research report in a moment, cause that's a fascinating kind of backstory to that. Just on the point though, that you said earlier about these sophisticated hedge funds perhaps can act on some of these reaction function that you see to these sorts of events. Similarly then with those ones getting hit, is there almost like a concentrated period of then other sectors that would benefit as those sectors fall? So is it almost like if you were looking at long-form portfolio management and a sector rotational play? Yeah. Do you get a defensive reaction to this? And if so, what are these defensives in this scenario.

Yep. And you've teed this up nicely because everyone loves an acronym and I've got a new one for you. The acronym of our times in 2026.

There be good.

It's the Halo.

You come up with this or is this, have you come up with this or is this a market?

No, no, I definitely can't claim this.

Okay.

It's the Halo stocks. That's what's being rolled out and spun out. HALO standing for Heavy Asset Low Obsolescence. Ooh. So what's really interesting about what's going on, and it's perfectly summed up this week, but it's been going on all year. We've got this very, very strange scenario where the, actually the S&P 500 index Here we are, like end of February, right? We're 2 months in now, and you look back at the last 2 months and overall across the year so far, the S&P's up 1%, basically flat. Okay? More than that, it's traded within a really super tight range of just 2.7%. That's the maximum range of movement. Across the first sort of 8, 9 weeks of this year. Now, to put that into context, that is the tightest range at this point in the year, 2 months in. That's the tightest range for a century outside of 1964 and 1966. So if you take those 2 years out, this is the tightest range for 100 years. And yet here we are, the press panicking about a monster sell-off. You know, an AI scare trade, except actually the index isn't moving.

It's a fascinating stat as well, because outside of the fear trade on AI or whatever it might be, the geopolitics of the day as well.

Yeah.

Like you are led to believe that the world's on fire right now.

Yeah.

And it's the narrowest range in a century.

S&P flatline.

Hmm.

Now lift the lid on that though. Just have a little look into the different parts of that index, as in different sectors. And actually there's some wild gyrations going on. So whilst that on the, on the surface, it looks super smooth. You go underneath and actually, if you're looking at the gap between individual stock moves and the relative stability of the whole index, right? That gap is actually the largest it's been since the financial crisis in 2009. So you've got huge micro, like single stock or different sector gyrations, but it's just that the sum of all of that action is zero. So this is basically a big portfolio rotation play. Money's not really coming out of US stocks here. It's just getting rotated across to different assets, right? And so who's benefiting from this? 'Cause if you're getting, 'cause there have been some big, as we said, IBM have got crunch. Even if you look at Microsoft this year, I mean, obviously one of the biggest companies on the planet and a huge beneficiary of this AI sort of boom, right? And if you start, start of the year, it was trading at $475. It's now below $400. Yeah, you got like a 20% sell-off just in the last 8 weeks in Microsoft, right? Right. But obviously big names, Visa and Mastercard got hammered earlier this week as we've been talking about some of those sort of fund managers, some real estate, like, look, there's a lot going down, but if the index ain't moving, where's all the money going? And so it's going into the halo stocks. So these are capital-heavy businesses. Okay. The thought is that there's just a bigger You know, it's, there's less chance of AI disruption if you're in a capital, if you're in a human resource heavy business, well, you're in trouble because AI can replace the human. But if you're in a capital heavy business, you know, think utilities, energy stocks, right? AI can't replace, you know, monster kind of utility infrastructure, physical stuff, right? AI can't disrupt that. And so actually that's where the money's going. And so whilst you're looking at the S&P flat, you look at the information technology sector, it's down like 7, 8, 9%. That's 30% of the index, right? Is down 7 or 8% on the year. But then you go and have a look at some, like energy stocks are up 25%, material stocks up 20%, you know, industrials up 15%, utilities up 15%, right? So you start to get the picture here. It's about AI disruption, but money's not, it's not like full-blown panic mode. Oh my God, the economy's going to collapse, which would lead to money coming out of stocks, full stop. It's actually just getting a major rotation of assets. So wild gyrations under the surface, but S&P's flat.

I was just going to ask then, so with the different types of hedge funds that exist with their different strategies, So what is a bit of a boom-bust for those who are more, I guess, stock picking, but for those who are trading pure volatility perhaps, or not, or it depends on sector, I guess you're saying.

Well, so you get, obviously get clever people figuring this out. Clever people with huge sort of assets under management to then kind of I'm talking about hedge funds, right? And actually the more the trade, so there's a thing called a dispersion trade. So that kind of, you know, involves basically buy, you're basically buying single stock volatility, right? Because when you look at a, on an individual level or on a sector level, it's pinging around all over the place. So you're buying that 'cause you think that volatility's going to stay high, but then you are placing a kind of hedged relative value position by selling index volatility. So you're buying single stock vol, but you're selling the S&P vol, which is exactly what's happening, right? But the more hedge funds position like that, the more actually that situation continues. So you kind of look back here at the end of February and you're like, okay, now it makes sense why we've been flat on the index side. 'Cause all these hedgies are kind of throwing billions and billions of dollars at this dispersion trade, which kind almost locks it into this pattern continuing.

All right. Should we have a chat about this Centrini research?

Let's do it.

Because I thought this was, you know, we've talked about behavior a lot actually so far, and I think this is also human behavior. When I'm working my, my previous life, I call it, when I was working on a desk and my job was to look at this type of source, this information. It's really interesting because there's a lot— it had all the hallmarks of culminating into the impact that it had. And it's kind of top line, it's the timing of when it happened. So the context of market positioning, the timing in a literal sense, i.e., at the weekend when markets are closed, which then allows the mind to wander when you don't get the expression of market price to digest it. So of course human minds tend to run away and that exacerbates the kind of condition, if you like. But yeah, a few things here. One was this, it was interesting from the way of which research and information exchange has changed. I remember my first early days at work on a desk and our job was to aggregate news. And I still remember, you know, 2005, 2006, I would have £20 in my pocket every morning from the desk that I would've taken home the night before. And I used to wait outside Bishopsgate, outside Liverpool Street Station, and there used to be the guy, Arif, that he would drop off the papers to the people on, you know, really busy main strip of the financial district in London. And he would give me my pack of 10 newspapers. So including the FT, the Times, the Telegraph, you name it. And then my job, so I would do that at quarter to 6 AM. Yeah. And then I'd get to work at 6 and my job was at 6:30 to write a report consolidating all of the major news out of those press articles. So this is like, yeah, 20+ years ago. It's interesting now though that we went through this phase and I think most probably people who are not in this game probably think a lot of the information comes from Bloomberg and the FT and things like that. And yes, a large proportion does. But what's more interesting now, and I think this reflects the demographic shift and their behaviors of where they spend their time, which is this Centrini Research, which isn't a massive hedge fund, doesn't have this fancy office block with thousands of employees. It's a super lean independent research shop. It's probably a better point of terminology. And they've expressed their ideas and have built their following and community on X and via a Substack. I mean, there's a guy called Alfonso, some of our listeners might be familiar with. He's an Italian portfolio manager. And he basically built his reputation through a Substack to the point where he built a hedge fund and had investment in his first round of multiple tens of millions. And now he's doing a second round 12 months after, built via Substack.

Yeah.

So the world's changed quite considerably. But the other point of this, and going back to that, I think reason what really sparked all the catalyst on Monday was also the nature of when information sits in somewhere like that. 'Cause I used to see this probably 10, 12 years ago. Twitter was this sort of mechanism where it was only really those in the know that were using Twitter for information edge. At the time, it used to cause these huge moves because most of the market is blinded by it. And so therefore they're in reaction function. And it's system 1, system 2. And if you're reacting, you generally market reaction gets much more exacerbated. So here, what's interesting is it's a real cult following. And I actually think that led to the sharing and circulation of that and why it grew so big because it went well beyond their reach. And it's almost like, certainly, you know, if you are a participant in the market and you've got a position to massage, well then it's the perfect fodder when, as you said, you know, there's lines in it like AI destroys jobs and incomes, it won't replace them. And hypothetically, we could see US unemployment rate above 10% in like 3 years' time. Like, of course that's going to spark interest and engagement. The reason why this Centrini Research has got such a following is because the founders, who we can also maybe touch on because they're super interesting guys, basically they called the SVB crash. So they were basically taking this short position and expressing their views. Why? And if you don't remember, SVB was this kind of regional bank in the US, what was West Coast, right?

And then Silicon Valley Bank.

Yeah, Silicon Valley Bank, and it triggered this, you know, it kind of, it got blowing up, then led to casualties higher up the food chain, I guess, who were exposed in lots of different ways. And they were on that. And since that moment, they basically have been all over it. And so this kind of 2028 global intelligence crisis was their headline title, and it's really moved things. But yeah, with the characters, What was interesting that there's two, and I think this is a good, I hope it inspires almost like a lot of the grads out there who, I mean, look, these aren't normal guys. These are pretty sharp cookies. One of them, ex-Citadel, ex-hedge fund, so forth. So yeah, these are unique people, but James Van Geelen, who's the founder, actually was a medical student and a paramedic. And it's, I mean, he's been plastered everywhere in the financial circles this week. He left medicine and founded an alternative medicine company and sold it to private equity, as you do, in 2018 and used the proceeds to become a full-time investor and researcher. And so, yeah, interestingly, a funny line I heard him quoted as saying this week in reaction to his report, which he definitely didn't think, I think when he wrote this, that it was going to go as big as it did or have the impact. He said, I quote, if I had known stocks were going to move on this, I wouldn't have given it away for free. Because again, this is all free. And again, I think that feeds into that kind of cult narrative. And as we saw with the behavior with GameStop and that era that we had a few years back, that does drive these things abnormally, I would say, as to the dispersion of normal information. The other guy, Alap Shah, it's interesting combination here. It's kind of like you and your co-founder, Will, you're kind of, you know, yin and yang. So this guy, his pedigree is the institutional half of the duo. As I said, ex-Citadel, I like the firm he used to work for as well, Viking Global. He was an analyst, so he's a kind of at the elite end of the hedge fund community. He himself founded what was basically an AI financial search tool, which he sold, and he's currently running a firm which is more about AI assistance. And I think when I was reading about this, they were basically having a conversation and that led to the research report and it sparked by Agentic AI and so forth. So yeah, interesting duo there.

Yeah, you kind of imagine like some kind of, like a 33-year-old former paramedic and then an ex-Citadel coder basically sitting down to write a piece of science fiction, you know, this world in 2028 and then they're like, let's, yeah, let's sensationalize it. And then they're kind of right. Send. And then if that was Sunday night, little did they know by the close on Monday, you know, you got some of the biggest payments businesses, Visa, Mastercard, some of the, you know, massive software giants have lost billions and billions of market cap. So, but then it's one of those things, it's like, is it the chicken or the egg, this research report? Because there is that thing about, as I've said, this trade's been going on for weeks and weeks. So if it kind of just accelerates a little bit, well then everyone's looking for reasons, you know, why, why has that trade now gathered a bit more momentum? And then people are trying to find stuff and then they'll latch onto something, this Centrini report, and then they're like, right, ah, this is, this is obviously the reason. And then, then everyone else thinks it's the reason because Bloomberg have said it's the reason, and then all of a sudden it goes viral and then all anybody can think about is the Sintrini report and oh my God, it's caused havoc. But it's impossible to know whether it actually was the catalyst to begin with or whether it was just the thing that people latched onto that added the fuel to the flames. Right.

So there's a lot of sell-side banks that came out. I think Goldman's, MS, others. And by the middle of the week, it kind of recovered.

Yeah.

In a sense of after that storm on Monday. So maybe just having a look at that as well and some of the rationale. I was reading about the software side and Morgan Stanley analysts were calling this an attractive entry point. I think one must remember what the purpose is of a sell-side institution, which is to kind of make opportunity out of any scenario. But their hook was that AI doesn't just replace software, it expands the TAM, the TAM being the total addressable market. The point there is that if software gets better, faster, companies buy more of it, they don't actually cancel it. And then the other three kind of parts of this was The banks being the net beneficiaries. While the Scare Trade feared that AI can displace bankers, MS flipping the script, they're saying that the likes of Citi, Bank of America, State Street, they're defensible picks. And the logic there is that these firms have massive legacy costs, and if AI can automate 20% of their back office or compliance, that flows straight down and through to the bottom line, the EPS growth. And then there's the payments fintech part. So Visa, Mastercard on the rebound, you know, because this is right heart of the center of the storm, if you like, at the beginning. But actually MS saying that those sorts of companies, you know, and if you think about it, I can see the argument that they're making, that agentic commerce, if AI agents are doing more buying, then they need a secure global rail to move their money.

Yep.

And they're probably gonna be the tra— the volume of transactions you'd imagine is gonna go up significantly.

Yeah. And I think like another example, like if you, if you're gonna take on an agent, right? An AI agent, let's say it's gonna operate within your business and you're gonna then look to I don't know, maybe replace perhaps a human being that might do that job or some of that job. And this is where the fear comes from. Oh, hang on, robots replacing humans. But actually, if you think about it, well, actually that agent, well, that agent itself needs, well, a Slack account. It needs a Gmail account. It needs, uh, seat on your CRM, HubSpot or Salesforce, for example. So actually, as all these agents come in, they need all of these things like a human being does. So you could actually see an increase in, you know, some of these software, like Salesforce has just been absolutely killed. The stock price has just been savaged over the last few months, right? But actually, there could be a world where these agents need they all need seats on Salesforce. So, you know, it could be that we've kind of run away with ourselves a little bit here in the short term and that actually there may be a second phase now where yes, agents come in, but they need all the seats as well. And actually in the end what happens is the company's margin just improves. And so yeah, I think this rebound, this kind of rebound trade that the likes of Morgan Stanley are calling, you know, has some merit. But that's not to say that we're out of the woods. I wouldn't say this, as I've said many times already, this trade's been going on for months and I don't think this is necessarily the very end of it. And I think the Nvidia stock price reaction to that earnings report probably sums that up quite nicely.

Okay, so let's talk about that to finish then. And so that came out on Wednesday night. So by then you'd had the sell-off, the recovery, and it was almost like on tenterhooks of like, okay, Nvidia, there's always a high bar to meet. Is this going to be the second flash of activity? I think people were probably leaning on the downside risk. So what materialized?

Well, what materialized was the usual stuff, as in just absolutely phenomenally ridiculous, insane numbers. Just smashing all expectations. Here's some numbers for you. $68.1 billion of revenue in the quarter. 68.1, beating the 65.6 billion consensus, and that is a 73% year-on-year growth rate. I mean, just staggering stuff, right? So that as a top line, you're like, wow, just extraordinary. Surely the stock market, or sorry, the share price gets a real pump higher off the back of that extraordinary stuff, right? It did not. We'll get onto that in a second. But data center dominance. So this is where you're starting to, I guess there's a concentration risk with Nvidia. So their data center dominance, so the portion of their revenue that came from all of this kind of data center buildout that the tech hyperscalers are going through when you're getting the Amazons and the Microsofts and the Googles and the Metas going, right, we're going to spend $600 billion this year they're spending on data center buildouts. Now, a lot of that is of course revenue straight to Nvidia. Well, of the $68.1 billion they did in the quarter, $62.3 billion is the data center buildout. So this is the concentration risk, right? Fine. As long as these hyperscaler businesses go on this spending splurge. As long as that continues, well, sure, Nvidia's revenue growth is going to look amazing, but it only takes one of them actually to start going, right, we're just going to take a pause. Because if one takes a pause, well, then others will start to rein that back in as well. And because they're so, so, so, so, so, so reliant on like 4 customers, well, then that's for me, that's the risk. It's the It's the revenue growth risk if those 4 players just even slightly change their tactics.

So in order to ascertain whether you are getting any early signals of that perhaps being a pullback, I guess one of the reasons why, and I was watching this when the numbers dropped, the aftermarket shares actually did go up originally.

Yeah.

Their outlook, I think, was Forget the numbers. It was the outlook that everyone was looking at for the exact reason that you were just describing. And that outlook, they see revenue at $76.44 to $79.56 billion. So the midpoint of $78 billion, that was more than $5 billion above what the Street was anticipating. The other element I saw that some were noting was that any lingering concerns that Nvidia is investing too much in others in attempt to boost the ecosystem.

Yeah.

They came out and said their cash and cash equivalents was $62.6 billion at the end of the quarter, and that was up nearly $20 billion for the same point of the year earlier. So cash and cash equivalents has gone up a lot. And also their outlook is even better than what they described before.

Yeah. Look, the numbers are amazing. And then actually the way that their strategy, you know, they have this sort of 12-month product development cycle, which is like super quick. Every 12 months, new chip. So we're kind of in, we're in Blackwell now is the current chip, right? Well, you can forget about Blackwell later this year because it's going to be Vera Rubin. The R200 chip, which is going to be 10x more efficient, like from an inference costs perspective. So what NVIDIA are doing is every year they are just taking a giant stride in terms of product development. This is a great defensive moat, you know, almost impossible for competitors to try and keep up with that. Now they've got this scale and this cash, they can go at a product development rate that's faster than everyone else. Super defensive, huge moat, amazing, right? Revenue growth off the absolute charts, forecasts monstrous. Okay. But it still doesn't— all of that's great, but if your 4 customers decide to just slow down their spending, well then their revenue's going to decline and we'll stop talking about 75% revenue growth and it'll actually be in reverse. So that's the risk. The risk isn't 2026. These big players have committed to spend $600 billion. It's 2027, it's 2028. And look, it could be that in 2027 they say, right, we spent $600 billion last year, we're going to spend a trillion this year. In which case, great, fine. NVIDIA's absolutely— sorry, they could spend $1.5 trillion in 2028. But the point is, Can that continue? Can that revenue growth— sorry, that CapEx spend growth from those 4 players, can it continue to grow at the rates that we've seen so far? It is really—

it doesn't. Isn't your investment duration going to buffer that in a sense of if you're thinking long-term? Well then, as you said, the moat that they have by this technological advantage, I mean, 10x. I mean, how does that even, how does that even work? Like, I mean, that's insane. But yeah, Nvidia is going to be, I mean, by all stretch of the imagination, let's not say commit to long, like Nvidia's gonna be the king in 50 years' time, but certainly the next 5 years. Yeah.

Oh yeah. Well, yeah, cert— well, certainly in the next 2 years.

Yeah.

Oof.

Challenging the buy. Things getting interesting now. And one thing is, is that Jensen Huang, who's the CEO of NVIDIA, he obviously knew about the market movement of this week.

Yeah.

And he explicitly addressed this like agentic, he called it an AI inflection point has arrived. This is what I love about him. He's like, he doesn't shy away from it. If there's like a fire, he runs to the fire. But that's almost like the genius behind like how he communicates as a leader to— look, he's not communicating here. Let's just be clear. He's not communicating to his employees. He's communicating to the market with this. But he was talking about the fact that the scare trade argues agents are replacing expensive software, as we've discussed. NVIDIA is proving that building those agents requires more compute, not less. This is kind of the center of his argument and the enterprise adoption of agents is skyrocketing, I think was what he said. He said, these were 4 quotes I picked out from, so they have like a a conference where he speaks after the earnings drop and the 4 that stood out. Number 1, computing demand is growing exponentially. Number 2, customers are racing to invest in AI compute. Number 3, enterprise adoptions of agents is skyrocketing. Probably the first 2 are common repeats. Third one's new. And then Grace Blackwell with "Nevelink is the king of inference." So he's talking again, I guess it's just highlighting their technological edge.

Yeah. Look, it's all great. It's all great for the next 2 years. But beyond that, beyond that, you know, we'll see. And actually, maybe just to wrap, I'm just looking at the NASDAQ futures because we were talking about, you know, the big banks coming out, right? You know, some great value entry points here following these sell-offs. Well, actually, the NASDAQ futures just about to break below yesterday's low. Yesterday into the start of yesterday's session, we gave back a lot of those midweek gains. Here we're going to break below yesterday's low. I wouldn't be surprised if we're back to where we started at the end of today. We're back to the lows we saw back on Monday. Because generally this kind of market is in a downward trend. Well, it's not in a downward trend, it's in a sideways range, isn't it? As I said right at the top of the show. But yeah, it's looking heavy.

So as a trader then, take that one step forward. Like, not, look, this is for educational purposes only, folks, but, and given that you were a trader for a long time, When you are observing a situation like this, so both the content of what we've been discussing, but also how the market is reacting from a technical perspective, what are you thinking? Are you looking for certain signals at this point? Are you on the sidelines just observing, going, there's too much information uncertainty, I don't have the conviction? Talk me through it.

That one, the last one, right? I'm on the sidelines going, no one knows what's going on here. No one quite knows what to do, which is why you're getting these crazy ups and downs. And there's a lot of volatility, but it's quite narrow at the index level, but huge swings underneath it. Right. And I think for now, I, yeah. I still think there's pro— I'm wondering whether these tight ranges these indexes are in. I, if I was a betting man, I'd say there's downside risk. The downside risk to break out of the bottom of that range is that's a higher likelihood than an upside breakout to new all-time highs. It's too much. It's too much. Carnage, I would say, going on.

All right. Well, thank you very much, Piers, for sharing your thoughts as ever. And yeah, wishing everyone a fantastic weekend. Thanks all.

Have a good weekend.