“Recent developments in artificial intelligence (AI) have forced markets to rethink their AI assumptions. We use our three-phase framework to track AI’s progress. U.S. stocks were flat last week. Tech shares slid on AI concerns, only to reverse on solid Q4 earnings. U.S. 10-year Treasury yields fell near five-week lows. This week we watch for any initial disruptions from the U.S. imposing 25% tariffs on Canada and Mexico, as well as a further 10% tariff on China. Last week’s volatility in AI-related stocks shows markets are learning in real time about the transformation underway. We see having a framework as key for tracking mega forces, or big structural shifts, given a widening range of market outcomes. We use our three-phase framework – buildout, adoption, transformation – to track AI. Recent AI developments raise questions about AI investment and revenue. We see a broadening set of AI beneficiaries and stay overweight U.S. stocks.”
Morten W. Langer
