2024.06.17 06:29
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"The Big Short" prototype stands up for the US economy, supporting the story of artificial intelligence and infrastructure

The US financial market is showing resilience and vitality driven by artificial intelligence competitions and infrastructure projects. Steve Esman is optimistic about the financial market and predicts that consumers will purchase new artificial intelligence smartphones and laptops, with Apple expected to see a large-scale user upgrade. However, if artificial intelligence succeeds, the competitive advantage of software companies may weaken, while hardware suppliers will continue to thrive. NVIDIA's stock price has recently rebounded significantly. In conclusion, the outlook for the US economy is optimistic, and the financial market is performing strongly

According to the financial news app Smart Finance, in the face of the Federal Reserve's active interest rate hikes, Wall Street has been puzzled by the sustained resilience of the U.S. economy. Some individuals insist that the U.S. economy will soon face a recession. However, Steve Eisman, a senior portfolio manager at Neuberger Berman, remains optimistic about the financial markets: "With the advancement of the artificial intelligence race and infrastructure projects, those doomsayers of the U.S. economy are wrong."

In an interview last Thursday, he stated: "We are just getting started, and I believe the only conclusion that can be drawn at the moment is that the U.S. economy is more vibrant than ever before."

Eisman, known for his depiction of the malicious bets on subprime mortgage loans that led to the financial crisis in the book "The Big Short," added that the next phase of the tech narrative will involve consumers purchasing new artificial intelligence smartphones and laptops. He predicted that this means Apple (AAPL.US), which has just released a series of new artificial intelligence features, will see a large-scale user upgrade cycle for the iPhone.

Eisman also mentioned that his company has already begun researching other potential targets benefiting from the artificial intelligence trend. However, he also emphasized that investors should hold onto Apple, stating, "You must hold onto your Apple position, as its position in the entire story is too crucial."

Microsoft (MSFT.US) and Google's parent company Alphabet (GOOGL.US) are both developing artificial intelligence technologies and are also "core holdings." Eisman also raised an intriguing hypothesis that if artificial intelligence succeeds as expected, the cost of creating software will "implode," meaning that the competitive advantage held by some companies will no longer be unassailable.

He added: "Therefore, you could say that the value of hardware will continue to be reassessed, while certain parts of software will weaken." In other words, technology hardware companies supplying the artificial intelligence field are likely to continue to thrive, but software stocks may not.

The significant rebound of NVIDIA (NVDA.US) is a recent example of the shift towards hardware stocks. So far, the stock price of this leading artificial intelligence chip company has surged by 166% this year, with an increase of over 200% compared to the same period last year, making it a company with a market value of $3 trillion, accounting for more than one-third of the S&P 500 index's gain this year.

NVIDIA's quarterly financial report shows no signs of the trend of hoarding artificial intelligence chips slowing down. However, it is worth noting that Torsten Sløk, Chief Economist at Apollo, also warned that such heavy reliance on a single stock represents significant risks.

In a statement on Wednesday, he wrote: "Such high concentration means that if NVIDIA continues to rise, everything will be fine, but if it starts to fall, the S&P 500 index will suffer greatly."