AI Mania vs. 3 Real Risks: US Stocks Won’t Crash, But…
US stocks rally on AI mania but 3 risks loom. No 2000 style crash. Strong earnings & economy limit downside.
“AI Disruption” Publication 9800 Subscriptions 20% Discount Offer Link.
Have you been feeling a bit dizzy from the heights lately? I’m sure everyone has heard about the massive rally in the US stock market recently. The Nasdaq has surged nearly 30% from its April low during the war-related dip. Some star stocks, including Intel, Micron, and SanDisk, have doubled or even tripled. US stocks have been rising almost every single day without stopping. Being in the middle of it, it’s hard not to feel nervous. Is this kind of gain really justified? Is there a risk of a major pullback? And if you stay on the sidelines, it’s hard to remain completely unaffected. Should we join this crazy game or not? Is it still too late to get in now? In this article, I’ll give you a clear answer.
Every month, I put together a comprehensive macro report on the US stock market for everyone. This month is no exception. In last month’s report, I told you that although the market had rebounded, it was far from over. So far, that view has been validated by the market. However, after another month, the situation has changed. For us investors, paying close attention to risks has now become the top priority.
Why has it risen so much?
To understand the future direction of the US stock market, we first need to figure out why it has risen so violently in the recent period.
There are two main reasons. First, after the release of war risks, there was a broad recovery in market valuations. We already analyzed this in detail in last month’s macro report. The war variable no longer influences market movements, and the results have indeed played out that way.
Second, and more critically, AI monetization has finally been proven to work. The landmark event was the explosive surge in Anthropic’s ARR. For the B2B-focused large model Claude, recurring revenue jumped from $9 billion to $30 billion in just one quarter, and now it has reached an astonishing $44 billion. This event marks the point where the entire AI industry has finally validated its business model. No one doubts the enormous commercial value of AI. What people were truly uncertain about was when that value would be realized. Now, with Anthropic’s successful monetization, that uncertainty has disappeared, leading to an explosive increase in the investment value of the entire AI sector.
