Exactly. That was a significant overreaction in uranium stocks. The world still needs efficient, reliable, and cost-effective energy. It's not like China made a major AI announcement and then closed down all its nuclear power plants and technology initiatives.
Thanks for your very helpful report. I especially appreciate all the charts and data. “While the underlying AI technology is legitimate and here to stay, a good portion of the AI boom is dangerous bubble.” Yup, I agree. It is never actually different this time. The euphoria does make some sense because what drives these bubbles is legitimate opportunity. I have lived through a variety of bubbles in career. However, I feel some of the leaders of this space were deliberately exaggerating their discussions of AGI, as you need to keep money flowing with burn rates like that. And that also locks out other promising innovation if you convince the world you need all that money. No legitimate breakthrough innovation happens in this controlled top down manic way. We are just seeing clear evidence of this. Hopefully there will be more exciting innovation come the way it should, now that we have opened Pandora’s box. I suspect we will. Once you break the illusion of the necessity of all that money in so few hands, the creativity can just explode. It will balance things out which is healthy, but it can get messy. Ultimately, it is always healthy for the world to have more creativity, not less.
Thank you, Lynn! Yes, that seems to be the pattern of tech booms/bubbles—especially when you add fuel to the fire in the form of ultra-low interest rates and quantitative easing.
Yes for sure. That is the pattern I have seen as well. Too much funny money brings out the worst in people and somehow it magically turns off the most basic amount of common sense. Egos get supersized. In this case, the hubris is just off the charts.
Great article Jesse! Although I just started my paid subscription to The Bubble Bubble Report today, I have been reading your previous articles and posts for many years since you began publishing on the RIA blog with Lance Roberts and team. Your analysis has always been top-notch, and your charting, markup, annotations and explanatory content are the best I've seen and have been very educational. We've watched the Everything Bubble grow for a long time, and I believe DeepSeek may be the Black Swan that finally brings it all crashing down. We're well past the Fed's first rate hike in March 2022, the Shiller CAPE is in the clouds, Dr. Jeremy Piger's Recession Probabillites are inching up, the Sahm Rule already triggered and has remained elevated, and Buffet began cashing out a long time ago in Dec 2023. The ISM Manufacturing PMI Composite Index has been struggling for the past 12 months, and the 10-3 Treasury Yield Spread has un-inverted bringing us closer to the start of the next Recession. The severe contraction in M2 also adds urgency as a move like that hasn't been seen since the Great Depression. Looking forward to future reports from you on the way down that describe strategies for identifying market bottoms in both equities and real estate. Keep up the great work Jesse, you work is excellent!
One of the biggest downturns was in the uranium related companies. AI all of a sudden doesn’t need all that extra power.
Camaco was down 18%. Others down a lot also. Somebody forgot we still need more energy with or without AI.
I will be buying uranium stocks tomorrow once they stop going down.
I agree with Nomi. It appears to be a knee-jerk reaction in those stocks and I am still interested in them for the long-run.
Exactly. That was a significant overreaction in uranium stocks. The world still needs efficient, reliable, and cost-effective energy. It's not like China made a major AI announcement and then closed down all its nuclear power plants and technology initiatives.
A great and realistic article, agree 100%!
A question: Due to the huge investment in AI announced by Mr.Trump a product like DeepSeek could be ban in USA?
Thank you :) That's a really good question and I'm sure it will be debated in the days ahead along with the TikTok issue.
Unlike TikTok, however, DeepSeek is open source and can be installed on your device without sending data back to China.
Gold is about to fly. Buckle up - Ranchlawyer/ RetirementRight from twitter
You know it!
Thanks for your very helpful report. I especially appreciate all the charts and data. “While the underlying AI technology is legitimate and here to stay, a good portion of the AI boom is dangerous bubble.” Yup, I agree. It is never actually different this time. The euphoria does make some sense because what drives these bubbles is legitimate opportunity. I have lived through a variety of bubbles in career. However, I feel some of the leaders of this space were deliberately exaggerating their discussions of AGI, as you need to keep money flowing with burn rates like that. And that also locks out other promising innovation if you convince the world you need all that money. No legitimate breakthrough innovation happens in this controlled top down manic way. We are just seeing clear evidence of this. Hopefully there will be more exciting innovation come the way it should, now that we have opened Pandora’s box. I suspect we will. Once you break the illusion of the necessity of all that money in so few hands, the creativity can just explode. It will balance things out which is healthy, but it can get messy. Ultimately, it is always healthy for the world to have more creativity, not less.
Thank you, Lynn! Yes, that seems to be the pattern of tech booms/bubbles—especially when you add fuel to the fire in the form of ultra-low interest rates and quantitative easing.
Yes for sure. That is the pattern I have seen as well. Too much funny money brings out the worst in people and somehow it magically turns off the most basic amount of common sense. Egos get supersized. In this case, the hubris is just off the charts.
Great article Jesse! Although I just started my paid subscription to The Bubble Bubble Report today, I have been reading your previous articles and posts for many years since you began publishing on the RIA blog with Lance Roberts and team. Your analysis has always been top-notch, and your charting, markup, annotations and explanatory content are the best I've seen and have been very educational. We've watched the Everything Bubble grow for a long time, and I believe DeepSeek may be the Black Swan that finally brings it all crashing down. We're well past the Fed's first rate hike in March 2022, the Shiller CAPE is in the clouds, Dr. Jeremy Piger's Recession Probabillites are inching up, the Sahm Rule already triggered and has remained elevated, and Buffet began cashing out a long time ago in Dec 2023. The ISM Manufacturing PMI Composite Index has been struggling for the past 12 months, and the 10-3 Treasury Yield Spread has un-inverted bringing us closer to the start of the next Recession. The severe contraction in M2 also adds urgency as a move like that hasn't been seen since the Great Depression. Looking forward to future reports from you on the way down that describe strategies for identifying market bottoms in both equities and real estate. Keep up the great work Jesse, you work is excellent!
Thank you so much for subscribing and for following me all these years!
Yes, the Everything Bubble has lasted for a long time but its days are numbered, as you are aware.
I agree with everything you wrote about the possibility of a coming recession and I wrote about that recently:
https://thebubblebubble.substack.com/p/is-gold-following-its-2007-2008-bullish