Dan Niles: AI Trades Are Having Issues, That Will Continue This Year

RUSH EXCERPT:
NILES: "As I said earlier is going to get a lot choppy year end you saw the at the end of last year where people started to question can a company like openai for example that’s only going to do 20 billion in annualized run rate revenues exiting last year how will they fund 1.4 trillion in capital commitments over the next eight years that’s why you saw oracle and softbank in others getting hit in a lot of the a.I. trades having issues. I think that will be something that continues this year, I think the companies will get funding at the beginning of the year but we’re going to have a repeat toward zeehan a name like cisco which was one of the top five picks entering last year was up 30% last year it is still a pick for this year because you have a multiple there that is in the high teens versus the S&P which has a trailing multiple of 26 times but you have the revenue growth accelerating because they’re selling more into companies that are trying to upgrade their network to take advantage of all of the a.I. You should see revenue growth accelerate their and the other one is apple to some degree the fact that they have been so behind on a.I. they launch iphones with a.I. capabilities plus a foldable phone you should see revenue growth really accelerate as you go into fiscal 27."