Episode summary
The AI trade in focus: Altimeter's Brad Gerstner joins 'Halftime Report' live in San Francisco
CNBC Halftime Report
· · 10 min · Hosts: Scott Wapner · Guests: Brad Gerstner
Summary
The panel focused on whether the AI trade still justifies the enormous capital spending behind it, or whether rising rates, debt and slowing enthusiasm are forcing a reset. Brad Gerstner said AI revenues have exploded higher this year, but the market is now moving through a consolidation phase as investors question whether open source is commoditizing frontier labs and whether demand can keep up with the buildout. He said his own exposure is now at the lowest level in three years, even though he remains constructive longer term and may start adding back on pullbacks.
Key takeaways
- Brad Gerstner said AI revenues have surged, but he still sees near-term chop and has cut his exposure to the lowest level in three years.
- Josh Brown argued that higher rates may be driven in part by the flood of AI-related debt issuance, not just inflation, and says investors should look beyond the crowded semiconductor names.
- Stephanie Link said the economy is still growing north of 3% and sees opportunities in both technology and the rest of the market as earnings broaden out.
- Malcolm Etheridge said the next leg of the AI trade may come from companies that use AI to do more with less, including software and other non-chip leaders.
Notable quotes
“THE NUMBER ONE QUESTION IN THE MARKET TODAY IS DO THE AI REVENUES JUSTIFY THE CAPEX BUILD OUT”
“I THINK IT'S GOOD WE HAVE THIS CHURN IN THE MARKET. IT AVOIDS BUBBLES”
“I THINK WHAT WE LEARNED YESTERDAY WAS THE LATTER IS A REALLY BIG DRIVER OF RATES”
“WE'RE STILL GROWING NORTH OF 3%”
“THERE'S BEEN A DEBATE ABOUT THE LOOKING ELSEWHERE, RIGHT”
How the episode opens
Look deep into the ai trade, assess the risks and rewards of this societal transformation, and what the recent action in the stock market suggests about the road ahead for investors. Altimeter's Brad Gerstner is with me today for the hour. He's been in nearly every major meeting at the white house that they've held on ai.
Snowflake ceo is going to join me as well today, as the future of software in this ai age remains a hotly related subject. The investment committee with me as well josh brown, stephanie link, malcolm etheridge. Can't wait to hear from everybody today.
You know what the market picture looks like. But let's show you because the dow is up big. But ai stocks are not.
I want to start with you. As we you know we think about semis. What's happening with core.
We've. And we'll get to core. We've more specifically in a moment.
Is this about ai slowdown concerns. Is this about debt levels and interest rates going up. Is this about choice.
See all of the above. What do you think?
Yeah of course it's all of the above. Well first great, great to be back here. We talked about this maybe a month ago.
Right. The number one question in the market today is do the ai revenues justify the capex build out. I mean, frankly, it goes back to the conversation I had with sam altman on my podcast last october when I asked him the question, how can you make $1 trillion of spending commitments when you have 13 billion in gaap revenue?
Well, what happened this year is revenues exploded higher, right? Remember the forecast for anthropic at the start of this year, $30 billion. Now, a lot of the reports have them doing at least $100 billion.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai trade
- market
- altimeter capital
- investing
- san francisco
Companies and tickers mentioned
- Altimeter Capital
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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