In this episode of The Canadian Investor Podcast, Simon and Dan revisit the AI trade after a brutal stretch for technology stocks and ask whether the market is finally starting to question the enormous amount of capital being poured into artificial intelligence.
They start with Anthropicâs amended S-1, where the latest numbers paint a less flattering picture than the original filing. Compute costs have started rising again as a percentage of revenue, operating income has slipped back into negative territory, and Anthropic is carrying roughly $895 billion of future commitments. With OpenAI also raising less capital than initially targeted, Simon and Dan discuss whether Anthropic may have to lower its expected IPO valuationâor even reconsider the timing of the offering.
They then look at the sharp selloff across semiconductors and NeoClouds, with many major AI-related stocks now sitting 20% to 60% below their highs. Meanwhile, the equal-weight S&P 500 and Canadian stocks have significantly outperformed the mega-cap-heavy indexes, suggesting investors may finally be rotating toward more traditional parts of the economy.
Finally, they dig into the financial side of the AI boom: soaring hyperscaler CapEx, rapidly increasing depreciation, growing reliance on debt and equity financing, unusual chip-leasing structures and the question investors are increasingly askingâwhat happens if the endless flow of capital into AI starts to slow?
They wrap up with a reminder that owning ten different AI stocks is not necessarily diversification, and why periods like this are a good opportunity to reassess portfolio concentration and distinguish between a great technology and a great investment.
Stocks/ETFs discussed: NVDA, AMD, MU, INTC, AVGO, TSM, ASML, CRWV, ORCL, NBIS, IREN, GOOGL, META, MSFT, AMZN, BRK.B, RSP, SPY, QQQ, XIC.TO, SMH
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