We are seeing in the earnings reports just how much we are starting to see this revenue traction on the back of some of this AI build out. The dominant theme continues to be the capex coming through. Just looking at hyperscalers alone, they are estimated to invest more than 350 billion so far this year, a 42% increase from a year ago. Investors have a little skepticism at the margin about returns on investment but for now, the AI theme continues to dominate positively.

I think AI investment is a bubble, a massive one, but it is not close to bursting. It might burst horrendously in late 2026 but for now, earnings and fundamentals remain very positive inflating the bubble. The market should get on the AI wave before it bursts.

We see three risks to watch: leverage growth through bond sales rather than cash flow, potential pullback in AI spend, and the premium investors pay expecting significant returns; if these don't materialize, we might see a drawdown but fundamentals remain supportive.

People talking about AI leading to concentration risk, top five companies about a third of the S&P 500. Diversification opportunities in Europe, Japan, and China tech. The theme is that US exceptionalism ended from December to February this year. Non-US markets are now outperforming US in a growing trend.

US dollar depreciation is becoming a headwind for US stocks for global investors, leading to increased FX hedging and favoring rest of the world equities over US equities.