There are people who want to kill artificial intelligence and all of its future successes. But they don’t have the power to stop A.I., the same way they couldn’t stop the web browser or the processor, the era of Wintel or enterprise software emerging as the generational fountain of financial youth. Others argue that the inflated era of the Magnificent Seven — Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), Tesla (TSLA) and, most important, Nvidia (NVDA) —reached its peak this month, and that we will now revert to our regularly scheduled Fed-inspired tyranny that wrecks the economy and allows nothing to go anywhere but down. Which is it? As we head into the second half of 2023, things look very murky. We seem to have a narrow market, the multi-trillion winners that have the strength to carry us forward, only to be gored by those left out and those with no real staying power, the endlessly failed insurrectional rotations that are always cheered by analysts and investors who want to see a broadening of the market. There can be no broadening without new money and most of that new money is ensconced in the warm cocoon of the 1-year Treasury, which yields 5%. And that’s where it will stay until the Federal Reserve says it’s safe to come back out. Of course, the central bank says nothing, so the sidelined money can’t find footing and goes nowhere. The rotations occur when there is strength in the economy, not weakness, and there isn’t enough strength to carry them beyond a few-percentage-point gains before they retreat and head back to the Magnificent Seven. The tension of AI and its all-encompassing force has been unleashed by the words and vision of Nvidia CEO Jensen Huang, who has called the emergence of ChatGPT, a language processing tool driven by AI technology, an “i-Phone moment” that will change the world. Say goodbye to the digital divide between those who could code and those who couldn’t. That’s the wonder of…
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