Rebecca Walser on Navigating AI CapEx, Tech Winners & RDDT Room to Ru

10/22/2025 10:45:00 PM	short term sharp up	5 days later	-3.73%	-5.60%

12/16/2025 6:41:02 AM	medium term cautious up	20 days later	+3.64%	+1.82%

9/11/2025 11:30:04 PM	short term cautious down	5 days later	+0.37%	-0.18%

Asks if the market is back to a risk-on environment after the best trading day since April 8th.

Nicole

Rebecca Walser

The market is priced for perfection; the selloff after Broadcom's results was overblown, and yesterday's recovery was good.

Broadcom's results were positive, but the market didn't like the guidance and margin compression from 77% to 74%.

Cites Goldman Sachs president on valuations and strong earnings (28% in Q1), suggesting the market is elevated but not extremely so.

Nicole

Rebecca Walser

Historical valuation comparisons may not apply; the AI revolution is bigger than the internet or industrial revolution, and we are at the infancy of monetization.

Monetization is always choppy, but this technology changes everything. Five years from now, current valuations will look low.

Notes CPI rose to highest in 3 years and PPI had largest gain in 3.5 years; asks about concerns on inflation and AI CapEx pullback.

Nicole

Rebecca Walser

PPI core (ex-energy) is up 5.1% YoY and 0.8% MoM, showing inflation is broadening beyond energy. Persistent inflation is bad for the Fed and makes a rate hike likely (70% chance of at least 25bp hike).

The Iran situation is complicated and won't resolve quickly, adding to inflationary pressures.

Rebecca Walser

Hyperscalers wrote $121B in debt last year (vs $30B average), showing AI CapEx requires new financing methods. Google front-loaded $80B ahead of AI IPOs.

This liquidity drain from current equities is a concern, especially with massive IPOs like SpaceX (potential $1.77T valuation).

Asks about sticking with AI winners despite CapEx concerns.

Nicole

Rebecca Walser

No one can pick AI winners/losers now; it's like VHS vs Beta. Ancillary companies (Micron, Dell) doing infrastructure and memory are coming back, but their results depend on continued AI data center investment.

You have to buy both and accept the loser because the winner will more than compensate.

Asks about expected corrections/volatility and year-end market view.

Nicole

Rebecca Walser

Expects volatility through Q3 due to midterms and Iran uncertainty, but a positive uptrend by Q4. Recommends a 5-year horizon to work through valuations.

Asks about the rate hike mentioned in notes.

Nicole

Rebecca Walser

PPI at 6.5% YoY and CPI above 4% indicate the market has swung to a 70% chance of at least a 25bp rate hike.

Asks about Reddit and its AI licensing.

Nicole

Rebecca Walser

Reddit's AI average revenue per user is only $5.23, giving it a long runway. It's a business on top of their core business.

Asks about Parker Hannifin as a space-related pick.

Nicole

Rebecca Walser

Parker Hannifin is a non-pure-play space company with propulsion and thermodynamic technology used in space launches. It could get re-evaluated as space missions increase.

Asks about Procter & Gamble's sales growth.

Nicole

Rebecca Walser

P&G has 3% organic sales growth, 70 years of dividend raises, 136 years of paying dividends, and a 2.9% dividend yield. It's a consumer defensive value play with a moat.

Asks about expected percentage gains on picks.

Nicole

Rebecca Walser

Reddit and Parker Hannifin are hoping for re-evaluations and upward trends on AI/space. P&G is a steady value play, not a high-growth pick.

Asks about gold, which pulled back 3% this week.

Nicole

Rebecca Walser

Gold fundamentals are still supportive; the global macro environment has worsened with Iran. Most analysts expect gold to end at $5,300-$6,300. This is a great time to buy.

Only two bear cases see gold in the $4,000s.

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