What AI Tech Stocks Are Signaling About This Bull

Transcript

Ken Fisher:

So, Tech stocks have resurged again this year after a weaker period last year and early in the year, and people logically ask, do I think that's going to continue? The answer to that is very speculative. Might they? Yes. Might they not? Yes. If you want to pin me down, I would say they probably continue to do pretty well. One of the features of that is we are moving, I believe, into the last phase of the bull market. That last phase can go on quite a while, mind you.

So, don't get overly nervous when I say that. There's not a bell being rung. But we're moving into a period, as evidenced by the Cerebrus IPO just recently, that shows the beginning signs of euphoria. I mean this with a gargantuan market cap for a company that's got a lot of potential, but is actually not very big. And a lot of orders for what it can make, if it can make it at scale, which is going to take a long time to really determine. The burst of price appreciation after the IPO is breathtakingly, in my mind, symbolic of what you get as you move from the periods of optimism in a bull market into the early periods of euphoria.

As I've often said, John Templeton's line is about the best line you can get to depict shifting sentiment of the market, which is that bull markets are born on pessimism, grow on sentiment, mature on optimism and die on euphoria. And the fact is, we got a lot of worrying and a lot of things people have been concerned about in all kinds of ways—weak economies in Europe as perceived, concerns still about tariffs, the Iran war, of course, what people think about politics almost everywhere. And then, in this environment, we get the market rising and we get these more speculative high hopes, but a lot of things necessary to fulfill that reality needing to happen to even begin to justify the valuations popping. And when that starts, it tends to continue until you get to the end, whenever the end is. That end could be a couple of years from now. I don't really know. But I do believe it's pretty likely that Tech continues doing pretty well.

Around the world, however, I point out to you, as I pointed out to you in 23' and 24' and 25', that the global market is doing pretty well and including hitting highs in most of the places where you've got no Tech at all, much less any AI. It's a global bull market, it's much broader than people think. It's not just AI, and AI stocks will probably have fits and spurts throughout that, despite doing pretty well, Tech doing pretty well, despite fits and starts.

So, I've answered the question as best as I'm able. But again, if something derails this bull market, I do believe when that would happen, the stocks would start to behave badly. They're stretched pretty far.

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