With artificial intelligence With the booming development of AI, many financial professionals are weighing two main questions: Is there a bubble in the artificial intelligence market, and if so, should it be compared to the Internet era of the early 21st century?
Danny Moses, a well-known trader and one of the real-life inspirations for the film "The Big Short," believes the answer to both questions is yes. While he doesn't deny the existence of the artificial intelligence boom and its long-term growth story, he also sees strong similarities between the two tech booms, suggesting that investors need to proceed with caution.
Moses, who rose to fame for shorting the housing market during the subprime mortgage crisis, discussed the potential problems emerging in the artificial intelligence market and how he believes investors should approach this rapidly developing field in a recent interview.
“The growth is real, but the math is wrong,” he said. “I think we’re reaching a point where the math doesn’t work.”
Moses emphasized that his views on the potential problems in the AI market are not a call to short the industry. Instead, he pointed out that it is a call for investors to do their homework, find the right companies, and gain valuable exposure in the event of continued market growth.
In his view, this means sticking to investing in the most dominant companies in the tech industry, companies with the resources to continue expanding and unlike some smaller companies which are subject to various constraints. Amazon is a prime example. Google, Meta and Microsoft .
“They can reduce capital expenditures at any time and their cash flow will still be positive, while other companies rely on spending in the field of artificial intelligence,” he added.
However, Moses is not optimistic about all large tech companies. He cites Oracle as an example. He cited the example of AI market problems, pointing out risks associated with the company's high debt levels and the cash needed to fulfill orders from technology clients. He also specifically mentioned highly volatile technology stocks, such as AMD. They consider CoreWeave and others to be high-risk investments in the field of artificial intelligence.
However, in his view, investors are finally beginning to consider the fact that not all AI stocks are "born equal," as the gap between relatively good and bad performance is becoming increasingly difficult to ignore.
“I think this proves that investors are starting to distinguish between winners and losers in trading, and they are more willing to invest in companies with stronger and more secure balance sheets to express the AI theme,” he added.
Moses also stated that he is bullish on uranium because the metal is increasingly touted as a key component of artificial intelligence construction, which will be essential to sustaining the industry for years to come.
Due to US electricity Supply shortages at some data centers They tend to use small nuclear power plants as the main power source, and uranium is the main raw material for nuclear power plants.
“One of the deals I like is uranium. Thematically, it should be feasible, but it will take a long time. There’s a mismatch between the idea that businesses will experience a period of growth in AI and the actual infrastructure needed to drive that growth,” he added.
(Article source: CLS)
