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- 00:00Give us the fundamental underpinnings that gives you confidence that this isn’t some tech rack rewritten. So I think what’s really interesting is we actually look at the equities landscape a little bit different than everybody else. So everything we do is through a thematic lens or a thesis driven. So we actually carve out the equities landscape into AI, decentralized energy grid tech space. And you guys are talking about a few minutes ago space quantum computing. So when we think about tech or we think about energy, we’re actually looking much more discrete. And right now, what we’re looking at right now is that we’ve seen an incredible rise in correlations between AI and decentralized energy transition metals, which again, rare earths and other metals critical to the transition. So those correlations have been rising over the last year. What’s also very interesting, though, is we’re seeing that those names or those themes have much higher beta to air than they used to. And more specifically, it means they’re getting hit a little bit harder on the downdraft. Right. So when you get a pullback, you’re seeing those decentralized energy grid tech transition metal names actually feel some pain on that. But when we look at how these secular trends are actually progressing, there is just such huge underlying opportunity in the bottlenecks, in the retrofits, in the fact that, let’s be honest, the power grid itself was already aging. There’s a lot of investment opportunities there. If you are a Bloomberg terminal client and you’re listening to the show, first of all, look up at the screen and really focus here. I mean, what Brian’s about to say and then check out her research on the terminal. Seriously, you’re doing a comparison with 2021. Why? Why? Look at 2021. And then you’re saying this is what we think will happen in 2026. Answer those two, please. So we’re looking to 2021 because that’s the most recent correction, if you will, that we saw and a lot of people were for back to 2021, where we see a lot of that, particularly US technology really dive down into 2022. So that’s a really good reference point for us, something that we are flagging though it’s pretty hard to make comps right when you go back to the dot com era. We’re not in the dot.com era. We’re looking at when we look at the 18 biggest, most powerful names in our theme universe, for instance, we’re talking about 24 trillion of market cap in the dot com area. That was more like a $7 trillion type number in today’s dollars. So what we’re looking at is 2021 is the most recent comp where we saw a massive market correction naturally and where we look to 2026, though we don’t expect that to happen. We’ve got rate cuts coming. We’ve talked about that a lot in the last few weeks as well. So rate cuts are coming. They’re not on the rise, which was also a big part of that time period. And then more importantly, though, we are very much flagging some tension. So while we do think that we’re very much in a boom, this isn’t a bust. It’s not to say that it’s not going to be without tension. And the biggest tension we’re watching for is the fact that we’ve now seen tech investors, tech dollars flock towards industrial materials, energy names. Well, guess what? Those tend to be longer build cycles. So the tension on quarter to quarter earnings, tech investors maybe aren’t used to the patients that are sometimes required in there. And so we do expect some volatility because of that.
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Are Markets Headed for an AI Bubble?
October 27th, 2025, 9:10 PM GMT+0000
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