Well, in midweek trade, we are looking at the major US stock averages in positive territory, but US stocks falling yesterday as big bank leaders set the tone for the trading day.
Yesterday we heard from the CEOs of Goldman Sachs and Morgan Stanley, and they warned that a 10 to 20% market pullback could occur over the next 12 to 24 months.
They did say the AI trade and rate cut hopes fueled the rally that has brought the major averages close to milestones.
Yet amid overvaluation concerns.
Only a handful of rate cuts expected by the next the end of next year.
Those catalysts may not be as strong as they were.
Well, joining me to weigh in here at the New York Stock Exchange is Matt Bromberg, chief operating officer at Wedbush Fund Advisors.
Matt, great to have you here.
Thank you so much for joining me.
Well, here we are in midweek trade.
The US government shutdown continues, but when it comes to the AI trade, we've heard from a handful of the mag 7 companies.
So where, where do we actually stand right now?
We stand on the runway, taxiing to the AI revolution, it's.
Listen, there's hype and hype creates fear and fear creates volatility, but we're dealing with fundamentals that are still there with valuations that are still reasonable with leaders in tech that are investing billions and this is a long term investment strategy and theme that we have very high conviction on.
Yeah, and it was very interesting to hear from some of the Mach 7 names last week and the reaction in terms of the major stock averages.
So last Thursday we saw Meta Microsoft pulled back and we saw Amazon and Apple hire at the end of last week, but you mentioned a keyword there, and I think that is valuation for the company.
So you said we're early in the race, so taking that analogy, how are you factoring all the moving parts right now?
We are acknowledging that this is an inflection point.
Uh, we are moving from the black box and hype that was AI to implementation and commitment and integration of these technologies.
Uh, again.
Because of AI and the excitement and the mystique, you do see hype with words like agenttic AI and workflow processing, but use cases are playing out.
The technology is being integrated.
Tremendous investment into infrastructure is happening and it will lead to profits.
So again, it's an inflection point and folks are now saying we're ready to start seeing how this drives revenue, but the underpinnings are there.
These are market leaders, these are really well capitalized companies investing significantly in infrastructure.
There will be winners and losers.
There, there are in every industrial revolution and that is what this is.
Yeah, and I think being able to separate signal from noise is important when it comes to artificial intelligence, but at the same time, 2025 has been the year when we have been hearing a lot of news regarding deals happening with artificial intelligence and of course when we're talking about national security, the implications and the impact are obvious, but what do you make of some of the deals that have been announced this year?
They've been intuitive, you know, we're in a deal cycle because we're not in an IPO cycle and You take that and you distinguish it from the tech boom and bubble of '99, 2000 and it's, it's different, it's not as speculative, you know, again, these are companies thoughtfully deploying capital.
And and facilitating innovation through acquisition.
So to me it shows discipline, it shows market conditions that are sustainable and a path to growth and implementation.
Yeah, and for viewers out there who are retail investors and they're watching this and they're trying to figure out ways to access the AI trade, especially given where we are right now.
But obviously there might be a real estate exposure, infrastructure exposure, but how are you dissecting all of these parts and where do you see opportunity?
We see opportunity across a number of sectors from Semis to utilities, to hardware, it really is going to touch such a broad landscape of sectors and We we really put a lot into the Dan Is AI 30 research report because it's focused.
It's focused on 30 names that are driving this revolution that are investing in this revolution, and they do cut across all of these sectors that are being impacted by AI and are driving AI growth and future profitability.
Pause there.
Yes, and Matt, of course we don't have access or the time to the report right now about this fund.
So give us the highlights here and what does it mean heading into the new year?
The highlights are that it's based on the fundamental research of a longtime tech analyst.
Granted, he is a bull.
He is enthusiastic, passionate, some say, about technology, and he's been pounding the table on many of these names for years and years, and We put again a lot of faith in the fundamental research that goes into identifying these future leaders.
It's um again, it's early innings is is how we're characterizing the AI opportunity.
OK, Matt, well, great having you here at the New York Stock Exchange today.
Thank you so much for joining us and thank you so much for sharing your perspective.
Thank you.
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