Market Briefing From Friday, March 1

​AI is becoming foundational - to the current and next waves of innovative technology, that we’re going to see across every industry. A couple selections in the sprinkling of 'very speculative' stocks are keenly focused on ; while a few major company big-caps we follow are embracing the advances as well.

Some of the speculative stocks will perform slower than others; or not at all. A few are sleepers that may perk up here and there, without knowing which will prevail over time. (That's even true for huge companies that were once in the forefront and perceived immortal, but didn't prove to be so resilient; that's not just in technology, but sectors from electronics, to aviation to financials).

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Certainly, companies like Alphabet (although Google is controversial how it does AI), Microsoft, Palantir, Apple, or others - like Adobe and for sure now in cellular, as Qualcomm - should benefit.  There are purer plays than the big companies. I call this focus on the 'application software' realm.

I have tried to slim-down my reports a bit;  which some prefer. Other members would prefer more in-depth (sometimes I will; not always of course, especially when I've done so previously with a stock or even Fed policies).

I think that stems from my decades in financial television when regardless of a paucity of financial news, or a surplus on a given day; we had to fill time to the fullest extent. At the very beginning it was 'music played for an hour' while a single person gathered news; and I initiated (hence thus produced) the first of a few cities with independent financial coverage. That's year's before the financial networks emerged (from which I gradually disengaged after CNBC); all of which had global resources that weren't available to me; so we joined. I am not retiring much further (never retire they say); but I need to ease a bit.. of course that usually means (look at this week's) even more frenzied times.

 

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Market X-ray: We emphasize AI in all aspects; not all will be successful.

Extended S&P is made possible by some broadening-out and that's been my requirement for this market to retain reasonable traction as mega-caps 'cool'.

In the current environment we think the AI small-caps will prosper more this Spring.

For all these stocks, it's not just ChatGPT or similar; it's 'numbers' based on business and projected business. We're less interested in chasing elevated or high-priced stocks with numbers already achieved; than disruptive hungry smaller companies that aren't just fantasizing about 'numbers', but actually do have contracts, seriously pending prospects, but with 'share price' lagging or not discounted yet. Just to talk numbers is hype; positioned to deliver is real; and sometimes is hard to differentiate that.

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Bottom line: so things are running a bit hot in the Indexes.. I agree with old saying of FOMO drives MOMO for sure. Within the AI value plays*; the idea of current and probably growth is what matters. And their joint partnerships.

It's becoming high-beta stuff in various areas and I'm not interested in being long the S&P as such; but continuing to focus on small-cap opportunities. At the same time 'should' S&P break; temporarily others will come down too; as I don't think there's extreme confidence, although this isn't a 'house of cards'.

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More By This Author:

Market Briefing For Monday, February 26
Market Briefing For Tuesday, February 20
Market Briefing For Thursday, February 15

I detail some of these speculative stocks (SOUN, BBAIr. etc.), with disclosures in investment status, in my full briefings.

This is an excerpt from Gene Inger's Daily Briefing, which ...

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