Market and economy largely isolated from oil shock of Iran war, says Wells Fargo's Ohsung Kwon

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Wells Fargo 7.5
Investment Bank $1900.00B
Ohsung Kwon 9.0

Market and economy largely isolated from oil shock of Iran war, says Wells Fargo's Ohsung Kwon

ndx

Yes, I think tech is going higher. Based on free cash flow inflection for hyperscalers, AI compute demand growth, and valuation/positioning reset creating upside risk.

12 calls

-4

no reliable edge (random outcomes)

12/19/2025 11:43:35 PM	short term up	7 days later	+0.25%	+0.25%
12/6/2025 1:57:50 AM	long term up	60 days later	-2.15%	-2.15%
11/11/2025 11:19:10 PM	short term up	5 days later	-2.81%	-2.81%
11/7/2025 10:27:28 PM	short term up	7 days later	-3.17%	-3.17%
10/24/2025 12:04:36 AM	short term up	7 days later	+0.59%	+0.59%
10/13/2025 3:43:24 PM	short term cautious down	5 days later	+0.97%	-0.49%
10/7/2025 12:54:42 AM	short term up	5 days later	-1.54%	-1.54%
10/3/2025 5:51:34 PM	medium term cautious up	21 days later	+3.37%	+1.69%
9/23/2025 11:33:29 PM	medium term up	20 days later	+0.31%	+0.31%
9/4/2025 8:56:40 PM	short term cautious down	5 days later	+0.83%	-0.42%

Show all 10 ndx results

Introduces O-Song Kwon, chief equity strategist at Wells Fargo, and asks how markets recovered most losses despite ongoing war.

speaker1
O-Song Kwon

Markets and economy are insulated from oil shock due to reduced oil intensity; fiscal stimulus provides cushion for next 6 months; market will be on sugar high for next 3 months.

Oil intensity down 75% since 1970s; only 1.4% of S&P opex from oil even at $100; fiscal stimulus from 'one-be-period fulfill' bill.
Asks what's propelling renewed interest in tech and if it can last.

speaker1
O-Song Kwon

Yes, tech is going higher; bullish on hyperscalers due to free cash flow inflecting higher as top line accelerates; AI compute power demand will continue growing.

Turned bullish few weeks ago; free cash flow estimates for hyperscalers cut 70% over past year but now inflecting higher; capacity coming online, demand outpaces supply.
Asks what changed sentiment from bearish to more positive on AI narrative.

speaker1
O-Song Kwon

70% estimate revision already happened; sentiment was very bearish; valuation contracted 30% at NASDAQ lows; now risk is to upside.

Valuation and positioning reset in March; hyperscalers were funding short for many hedge funds.
Asks if tech trade will see massive split between hardware/semiconductor names and software names again.

speaker1
O-Song Kwon

Likes NASDAQ more broadly; software is dead money despite valuation reset; prefers semis over software; AI bull market moving from capex-driven to monetization phase.

Software trades at same multiple as department stores; earnings revised higher but stocks deteriorated; semis outperformed software for almost 3 years.

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