Episode summary
Why Markets Can’t Price AI | Prof G Markets
Prof G Markets
· · 28 min · Hosts: Ed Elson, Scott Galloway · Guests: Robert Armstrong, Tom Lee
Summary
Tech stocks sold off after Amazon’s earnings and its plan to raise 2026 capex to $200 billion, and Robert Armstrong argued the market is wrestling with a basic uncertainty problem: no one knows whether AI will make the big platforms more profitable or less. He said the spending by Amazon, Google, Microsoft, and Meta is so large that investors are asking what the ROI can possibly be, and he framed the recent rotation into Walmart, Costco, consumer staples, energy, industrials, and international stocks as a premium for certainty.
On crypto, Tom Lee said Bitcoin’s sharp drawdown reflects a cascade that began with an October 10 price shock, deleveraging, liquidations, and balance-sheet damage, then got reinforced by macro shocks and a surge in gold. He argued that Bitcoin still has a store-of-value case over longer periods, but acknowledged it now faces a narrative problem because gold has been the asset that held up during recent stress.
The host closed by arguing that Bitcoin’s price action does not prove the story is over, but it does show that investors are not treating it like digital gold right now. He said the market has made a clear choice for actual gold over Bitcoin, while also warning that no one really knows whether Bitcoin will keep falling or stage another major rally.
Key takeaways
- Robert Armstrong said the AI capex boom has created a market uncertainty problem, not a clean bullish or bearish signal.
- Armstrong argued investors are paying a premium for predictable businesses like Walmart, Costco, staples, energy, and international stocks.
- Tom Lee said Bitcoin’s selloff began with October 10 deleveraging and was worsened by macro shocks and liquidations.
- Lee argued Bitcoin still has a long-term store-of-value case, but gold is winning the current safe-haven trade.
- The host said Bitcoin’s latest drop does not mean the story is over, but it does mean investors prefer physical gold right now.
Notable quotes
“The amounts of money these companies are now talking about, Amazon, Google, Microsoft, Meta, are unbelievable, right”
“Nobody knows anything." And what he meant by that was that you don't know, you make movies and you don't know if you've made a good movie or not”
“there is a tremendous premium for predictability and certainty right now and that's a big part of this regime change”
How the episode opens
Today's number, 135 million. That's how many people watched Bad Bunny's Super Bowl halftime show. The president was not happy with the performance.
He said the dancing was quote disgusting, especially for young children. That is a sharp reversal from his previous views on what's disgusting for young children. Welcome to Profy Markets.
I'm Edson. It is February 10th. Let's check in on yesterday's market vitals.
The S&P 500 and Nasdaq climbed as the Dow hit its second consecutive record close. Meanwhile, the dollar fell. Gold climbed back above $5,000 and Bitcoin was roughly flat after its draw down last week.
More on that in a moment. Okay, what else is happening? It's been a harrowing week for the tech sector.
Amazon is down 15% over the past 5 days after spooking investors with a nearly 60% jump in its 2026 capex outlook. The announcement came amid a brutal tech selloff as new tools from Anthropic ignited fears that AI could kill the software industry. All told, the selloff wiped out over $1 trillion in market value of tech stocks.
However, markets rallied on Friday as some traders bought the dip. Stocks continued their rally yesterday as Google raised $20 billion in a bond offering to fund its AI spending. Still, Amazon fell deeper into the red.
All right, here to discuss what's happening to Amazon and the rest of the tech stocks, we're speaking with our favorite commentator, Robert Armstrong, US financial commentator for the Natural Times, author of the Unhedged Newsletter, co-host of the Unhedged podcast. Rob, welcome back to Property Market.
Great to be here. — Let's get right to it. We'll start with Amazon. Amazon reported earnings. They basically met revenue expectations. Basically met on earnings. It was a little bit of a miss. — Yes.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai market pricing
- software sell-off
- amazon earnings
- bitcoin
- crypto market outlook
Companies and tickers mentioned
- AMZN
- Amazon
- Fundstrat Capital
Watch the episode
Watch “Why Markets Can’t Price AI | Prof G Markets” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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