Strong jobs report sent yields surging. Investors are rotating out of companies vulnerable to AI. What did we learn this week and who's next?
Francine Lacqua
Neil Camping
The market has moved from reacting to actual AI model releases to the potential for models being released, impacting sectors like commercial real estate.
This is about business models, not just valuations. No one wants to be Kodak.
Francine Lacqua
Bata Matheson
The market is trying to figure out all the losers in the space of two weeks. We don't know the terminal value of these companies.
Are you expecting this intensity of rotation to continue?
Francine Lacqua
Bata Matheson
Markets are priced for perfection. In Europe, price reactions to earnings have been negative even when beating expectations.
How much of this is market angst because too much was priced in? Can CEOs protect their business models?
Francine Lacqua
Neil Camping
This is a discovery process of terminal values happening in public and private markets.
After this week's rotation, what looks more or less attractive?
Francine Lacqua
Bata Matheson
In the US, one of the most attractive sectors right now is tech/software based on forward P/E versus history.
In terms of AI in Europe, is there anything you're looking at specifically?
Francine Lacqua
Bata Matheson
Europe didn't participate much in the first phase (hyperscalers, data centers).
Neil Camping
Siemens is a good example. You need the pipes and infrastructure to enable AI.