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Why AI Demand Could Drive Markets Higher for Years

May 14, 2026

Video Transcript

Kyle Reidhead joins us now.

Kyle is the co-owner and head of research at Milk Road.

Kyle, really nice to have you here on the show today.

So Google obviously posted not long ago, massive earnings.

Talk to me first and foremost about that tranche of quarterly results or overall, are current valuations for a lot of these big tech names still justified at these levels?

Yeah, it was it last week or two weeks ago now, we had 4 of the biggest companies in the world all do their earnings on the same day, and all 4 of them crushed it, and it was huge.

I think it was 67% year over year growth on, on Google Cloud, Amazon, uh, Microsoft, and I think it was Amazon, maybe it was the other one.

Um, and, and they all showed incredible numbers, and so I think they are justified right now.

We're seeing a boom in the AI space, not just in infrastructure, but in the use, you know, in, in the use of all these things, cloud being a big part of this, semis being a big part of this, etc.

Uh, and so I think we're seeing some incredible growth in these companies, and I think it is justified.

At some point, I'm sure this is gonna get way overblown and we're gonna get overheated, but I'm not seeing it right now.

I think there's a lot of room to grow here for, for many of these companies over time.

I want your take on market leadership.

Can chip stocks most specifically keep up their momentum and really keep leading this market to new highs?

I do think they will.

I think there's still a lot of demand for, for chips, for memory, for, for all of these, and I think they're going to grow.

I don't know that they're going to have as good as the year they just had or even just as good as the last few months as they, as they've just had, um, but I think there is secular demand for these assets, uh, and so I don't think this stops.

I think the biggest companies in the world, the biggest countries in the world, they're all, um, you know.

You know, want more and more of this stuff.

We want to convert energy into intelligence.

That's basically what's happening, and we need the chips to do it.

And so I think there's ongoing demand for this.

We already saw, I think Morgan Stanley put out, we're going to have 1.1 trillion in uh in AI cap spend next year.

So this is growing.

It's getting much bigger.

And every quarter, it seems like we're guiding higher for each of this.

And so, that's just more capital going into the semis, going into the chips.

Um, and so I think this is going to continue to.

Grow.

Do I think memory memory is going to be continuously the biggest mover of them all?

I think at some point that's gonna change.

Uh, there's gonna be a different bottlenecks throughout this AI infrastructure buildout.

Uh, I think actually energy is probably, uh, a, a, a big thing here, and I mean, energy specific to data centers.

Um, so I think we're getting a big bottleneck there as well.

So, I think it's, it's kind of moving throughout the buildout, um, but I think there's still plenty of room for chips, uh, over the coming years.

Yeah, data center energy, not to be confused with Energy Energy, which obviously has also had an extremely strong year to day performance.

Kyle, big tech has big earnings, but they also have big layoffs.

What is your take on the current tech layoff cycle that we're seeing?

Yeah, there's been layoffs in tech, but in tech, but at the same time, I think it was about 70,000 or so in the, in the last month, uh, uh, that we saw.

And so it's the biggest we've seen since I think 2023.

But at the same time, there's still a ton of hiring going on.

I think what's happening is the world is evolving, right?

Uh, the way we use the internet is changing and what we need in the workplace is, is becoming very much different than it used to be.

Uh, and so there's, there's certain roles that I think we just no longer need.

I own and run two companies and we've very much been recycling who we have work for us.

We're still hiring a ton because we're growing, but we're looking for people that use AI, right?

We want to find superhumans, not just, just normal humans.

And so I think all that's happening here is, sure, we're getting rid of some jobs, but I think they're still hiring a ton of other people.

It's just in different parts or different types of people that have different skill sets.

So, I'm not overly concerned.

We haven't seen unemployment, you know, jump too high.

Uh, and so I think we're, we're in a productivity boom.

And so I think there's, there's plenty of jobs that there's still just might not be the jobs that you went to school for that you want.

Uh, so I think people need to adapt on, on where the economy's going.

Kyle, it's, I'm out of time.

Please come back anytime.

Kyle Reidhead, had, co-owner and head of research at Milk Road.

Kyle, thank you.

Kyle Reidhead, co-owner and Head of Research at Milk Road, joined in to break down the continued dominance of big tech and the growing AI boom driving markets higher. Reidhead pointed to massive earnings results from companies like Alphabet, Amazon, and Microsoft, noting that cloud growth and AI demand continue to justify current valuations. According to Reidhead, the AI revolution is still in its early stages, with infrastructure, semiconductors, and cloud computing all benefiting from explosive growth as businesses and governments race to invest in artificial intelligence capabilities.

Reidhead also shared his outlook on chip stocks, saying he believes semiconductor demand will remain strong for years to come. He explained that the world is effectively “converting energy into intelligence,” creating massive demand for chips, memory, and AI infrastructure. With projections calling for more than $1 trillion in AI capital expenditures next year, Reidhead says there is still significant runway for companies tied to semiconductors and data center expansion. While he expects bottlenecks to shift over time from chips to areas like energy supply for data centers, he believes the overall AI infrastructure buildout is far from slowing down.

The conversation also touched on the recent wave of tech layoffs, which Reidhead sees less as a warning sign and more as part of a major economic transition. While thousands of jobs have been cut across the tech industry, he argues companies are still hiring aggressively for workers who can effectively use AI tools and adapt to changing workplace demands. Reidhead believes the economy is entering a productivity boom fueled by artificial intelligence, where businesses are prioritizing highly adaptable, AI-enabled talent over traditional roles. In his view, the future job market will reward people who evolve alongside the technology rather than resist it.

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