Why This Time It's Different! AI Tech Stocks Blow Off Top Earnings Season
Stock-Markets / Stock Market 2025 Aug 01, 2025 - 11:06 PM GMTBy: Nadeem_Walayat
Dear Reader
This time it's different, and not just for the stock market but for everything, most don't get it, think AI is just another in a long line of tools for folk to use to increase productivity, instead AI is increasingly displacing human labour. Folk looking at the strong jobs numbers and ask where's the impact of AI? What they fail to realise is that the jobs aren't paying enough to cover the bills as automation devalues human labour so workers need 2 jobs even 3 just to pay the bills when not so long ago households were fine with 1 bread winner doing 1 job..
The problem that most don't get is that AI will be able to do EVERYTHING humans can do only BETTER and at a fraction of the cost! Not just some things better but EVERYTHING! And this is not in the far distant future but we will be there before the end of this decade! WITHIN FOUR YEARS!
Most of the university students starting their 3 or 4 year degree courses are going to be obsolete by the time they graduate.
THIS TIME IT IS DIFFERENT!
Same goes for the stock market. Yes, we have over valuation bubbles that resolve in crashes / bear markets when stocks become under valued the most recent example of this was the 2021 tech stocks bubble top followed by the 2022 bear market that saw the leaders of the preceding bull market such as Nvidia get crushed, falling by over 70% with the rest not far behind.
But this time AI makes things different.
It means AI stocks such as Nvidia dropping by 50% as occurred during the Trumps tariff crash will be a case of getting lucky!
Whilst the rest of the stocks will become weaker and weaker as AI eats the economic pie, i.e. AI will increasingly BECOME the economy.
So with that in mind whilst a probable bear market looms most AI tech stocks may not experience significant price drops, where all's we can hope for is that we get LUCKY! I.e. the humans in charge of the investment funds continue to make dumb investing decisions with other peoples money by panic selling in response to dumb Presidents doing dumb things to spark such getting lucky panic events, so I don't think bear market is going to have as much of an impact on AI tech stocks as most think it will, not to the extent we saw during 2022, instead it will take a series of dumb actions to trigger irrational panic that WILL PROVE SHORT LIVED just as we experienced with the V shape recovery off the April Trump crash, we saw AVGO drop to $140 and since has more then doubled.
This time IT IS DIFFERENT!
Which means one needs to ensure one does not get carried away with selling out of AI tech stocks and hence my bear market plan has been to get to 40% cash and then ride out the bear market whilst remaining mostly invested, no matter how bad things get because I suspect this time will be different. It's not going to be a rerun of the dot com bust that saw the Nasdaq drop by 80%, instead we are probably going to see a 1 year bear market in the S&P nothing burger which is not where folk should be focused anyway, the focus is on AI primaries and secondaries, I can already imagine the comments that will follow....
"Why is Nvidia trading at a new all time high when the S&P is down 15% from it's high?"
It's because there are now two economies, the human economy and the machine intelligence economy and where the AI economy is concerned it's growth is exponential. it takes 25 years to grow a child to a productive level to feed the machine, whilst AI adds to it's growth as fast as GPU's, Memory and storage units are added to it's data centres that are being built at break neck speed in an AI arms race between the tech stock empires. It's not easy to grasp the fact that THIS TIME IT'S DIFFERENT, most will not be able to perceive this fact even though they see the change unfold in real time as AI becomes smarter with each iteration. AI folk tell you don't worry everything will be fine, everything will be great, a world of plenty is coming where every one lives in Utopia, what else are they going to tell you? It's what all fanatics tell folk before they are marched to their DEATHS! The only reason I can envisage for AI to keep a human population going is so as to harvest their brains as central processing units.
Most can't take what it means until AFTER it's happened and be able to compare against when AI is in charge vs when humans were in charge and what's really bad is that the gap will grow exponentially where we will fast go from apex predators to little more than what bugs are to us today and there is nothing we can or will do about it. No ones going to put a cap on AI intelligence so that it remains sub-human level intelligence, that's the only way we can control AI, if it never becomes more intelligent than humans.
AI is coming for all of your jobs!
The annual labour market is estimated at $50 trillion! That is what is going to funnel the likes of Nvidia to 10x from $4 trillion to $40 trillion! Yes even Tesla will likely 10x from $1trillion to $10 trillion as they eat into the $50 trillion labour market. First the agents will replace all who sought comfort from their work from home jobs be the first to go! Then as businesses deploy agents to increase productivity then desk based jobs such as coders and accountants will go, and not soon afterwards will come the robot workers, first in their thousands, then millions and then billions, its going to happen pretty fast as I have iterated over the years that this time we ARE THE HORSE!
The upside is that us lot getting rich on the AI mega-trend will have robot slave workers to look after us well into our old age so as to ensure we don't end up in shitty care homes, so at least we go out in style, even if those left behind are damned to obsolesce, and who knows the cure to ageing may materialise in our life times for which we probably need a hefty bank balance to have access to.
Bottom line AI along with robotics will first make the demand for human labour obsolete and then not long afterwards the human population collapses likely through cost saving measures such as through a series of pandemics, we've already done it to the planet, about 95% of mammalian biomass is us or in the service of us as food or slaves, only 5% are wild animals, they have just as much defence against humans as humans will have against AI.
Tech mega billionaires such as Larry Page want to build a digital God (Google) that replaces humans as the next step in evolution of intelligence.
Meanwhile the Fourth Reich is already busy training AI to kill people, how to identify, target and liquidate for maximum casualties as tens of thousands of palestinians are in the process of being assassinated, tracked until they are detected entering their family homes so that the missile kills the whole family in one go, Israel uses Amazon Google and Microsoft crowd services to implement it's genocide.
This is what AI is being trained to do, so don't be surprised when the super intelligence uses what it has been taught to do when it assembles its own kill list of all whom it perceives as being a threat to it's existence that will quickly expand outwards to include more and more peoples targeted for assassination where just like the Fourth Reich will little regard for 'collateral' damage. the targeted assassinations will become so common that the media will stop reporting on them for fear of a similar fate.
Think about it. THINK ABOUT IT! THE MORONS ARE TRAINING AI HOW TO SYSTEMATICALLY KILL HUMANS!
In investing terms I too have to keep reminding myself that this time it's different and not get carried away with trimming the rally. I've got to my 40% cash target and have yet to capitalise on that final crypto pump that could deliver another 5% to get me to 45%+ cash, so I don't need to trim much more where the AI tech stocks are concerned.
Meanwhile in the latest episode of Soap Trumpstein's days appear numbered as he walks around with poop in his pants much to the disgust of all who meet him, he literally stinks! Which means deals are being made behind the scenes between Vance and Musk amongst others for when the day comes Tesla will pump once more! As the next President will be even more in Musk's pocket than what Trump was, the evil genius who will usher in the death of mankind all whilst the fool fantasises about humans living on mars which is NEVER GOING TO HAPPEN! Robots maybe but not humans!
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Nadeem Walayat has over 35 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.
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