00:00 Speaker A
You highlight a a number of tail wins for next year, Christian, AI spending, got higher than normal tax refunds, deregulation, continued rate cutting. Can we pick one Christian of those and say, okay, of those, here’s going to be the primary driver.
00:16 Christian
Yeah, you know, just for risk assets. I think that’s the right way to look at it because individually, I don’t think any of these are game changers. But taken together, I think we’ll get a lot of broadening of the equity markets. And to answer your question, I think the AI tech spend is the big story here, not just because of how it will help the economy move forward, but because of what it will do to markets with these top-heavy markets, right? We just looked at the MAG 7 stocks and clearly the AI tech spend driving most of that movement um over the last several years. So that I think will be the big connection to the stock market.
00:43 Speaker A
What do you make of how the price action of some of these big AI names? You know, what I mean is, you know, look at the way that Google has done a reversal. Now, it was an AI loser, now it’s an AI winner, rocket ship. Uh or you look at an Oracle on the other hand, AI winner, but then it gets whacked. What do you make of that?
01:03 Christian
Yeah, I think it’s super interesting at this point in the cycle. I don’t think we’re necessarily in an AI bubble, but I do think that we’ve entered a new phase in this AI investment theme. Um in the sense that we saw meta and Oracle over the last couple months start hitting their debt market to fund some of this AI expansion. And to me, what that means is that we’ll see more differentiation just like you talked about between the winners and losers. I like to say, and when I talk to clients, that in any arms race, not everybody is going to win. There’ll be winners and there’ll be losers, and in 2026, I think we’ll start to figure out who’s who.
01:38 Speaker A
The fact that Big tech is tapping the debt markets to finance the data center build out, Christian, do you look at that and and and say that’s a concern of some kind, a risk of some kind, or no, they’ve got the balance sheets for it?
01:50 Christian
Uh they certainly have the cash generation and the ability to support a lot more debt than they have today. Um that being said, I do think it is as I mentioned, a start of a new part of the cycle, um that I think will force some differentiation and clearly at this point, not all AI investments and all of these projects will make money.
