Episode summary
Deja Vu All Over Again (Ep. 174)
Facts vs Feelings
· · Hosts: Ryan Detrick, Sonu Varghese
Summary
Software, AI-linked stocks, and Bitcoin sold off hard even as the broader market held up much better than the headlines suggested. The host and Sonu Varghese argued that the recent drawdown looks more like a sentiment and valuation reset than a collapse in fundamentals: software prices fell sharply while earnings stayed resilient, and the software ETF’s forward P/E compressed to levels not seen since 2014. They framed the move as a repeat of last year’s fear cycle, with another new AI shock, the “Claude crash,” triggering a sell-first reaction across parts of technology and private markets.
They also emphasized that AI capex is still accelerating, not slowing. Alphabet, Amazon, Meta, Microsoft, and Oracle are collectively set to spend hundreds of billions on data centers and related infrastructure, which they said should support profits beyond just tech. That spending, along with large fiscal deficits, was used to argue that recession remains unlikely in the near term.
Outside the U.S., the conversation highlighted stronger performance in Japan and emerging markets, a firmer yen, and record highs in the Nikkei. Bitcoin was discussed as behaving more like software than a separate asset class, with the hosts noting that its recent weakness may be tied to the same risk-off pressure hitting software.
Key takeaways
- The host and Sonu Varghese said software looks cheap on valuation, with the sector’s forward P/E around 21-22x, the lowest since 2014.
- They argued that Alphabet, Amazon, Meta, Microsoft and Oracle are driving a massive AI capex wave that should support broader profit growth.
- Varghese said recession remains unlikely near term because AI capex is above 2% of GDP and fiscal deficits are around 6.5% of GDP.
- The hosts said Japan and emerging markets are quietly leading returns, while the Nikkei hit new highs after the election result.
- They suggested Bitcoin may be trading like software, with its weakness reflecting the same shift in sentiment rather than a standalone macro collapse.
Notable quotes
“the price has gotten crushed, software is down despite strong earnings”
“No let up in AI related capex spending. Literally no letup”
“one company's spending is another company's revenue and profits”
“Half the time you're going to lose money and more than you want, you're going to lose the whole thing”
How the episode opens
Welcome to the Facts Versus Feelings podcast. I'm your host Ryan Dietrich and I'm joined by my co-host Sonu Vargis. Cutting through the noise each week with Ryan Dietrich, chief market strategist and Sona Vargis, VP global macro strategist. taking out the boring and helping investors focus on what really matters.
All right, Sonu, we're back. There's some good news out there. There's some good news. You ready for it? Ready for it? — Tell me. — Uh, first off, the Patriots lost, which America rejoiced. We're sick of the Patriots. Sick of the Patriots. Um, no offense to the Patriot fans, but we're sick of them. But an NFC team won by double digits. Okay.
All right. That's good news, right?
Listen, Sony, this is great news. Besides the fact the Patriots lost, which is wonderful. The other side of this, 19 times out of 21, the stock market was higher the year an NFC team won by double digits.
That's 90 and a half% of the time the market's higher. Up an average of almost 15% on average. I know we've got that uh Drew.
We can put that chart up right now on the YouTube channel that bulls love when um this scenario happens. Of course, never blindly invest in this. This is more playful.
Uh but it is what it is.
Should we go the other way because our outlook said 12 to 15%. — Yeah. — Does that mean you know like we should have bet on the Seahawks? — Yeah. Well, — Maybe had a blowout. — Hey, I should have. — Apparently, we should have because it happened. So, it's it's where it is. So again everybody welcome back facts versus feelings rhy and sonu episode 174 day de it's deja vu all over again the famous quote by Yogi Baraher.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai market sentiment
- valuation compression
- software/tech selloff
- ai capex cycle
- bitcoin volatility
Companies and tickers mentioned
- Anthropic
- Carson Investment Research
- Carson Group
Watch the episode
Watch “Deja Vu All Over Again (Ep. 174)” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from Facts vs Feelings
Facts vs Feelings, this episode and its artwork belong to Carson Investment Research. Octagon is not affiliated with the show; this page is an independent summary.
