David Woo argues that the AI trade is breaking down, higher AI capex is now being punished, and the market is starting to price in slower growth with still-elevated rates. He is bearish on U.S. stocks and Bitcoin, constructive on gold only on much lower levels, and prefers India over U.S. tech for the next couple of months.
Watch on YouTube ›Get the market thesis, key claims, assets, contradictions, and follow-up questions from any financial video — then unlock a version personalized to your portfolio, watchlist, and favorite speakers.
This interview centers on David Woo’s view that the market has shifted into a more fragile regime: lower growth, higher real rates, and a weakening AI leadership trade. He says the key change is that investors are no longer rewarding higher AI capex; instead, stocks like Microsoft, Amazon, Google, and Meta have been punished when they raise spending guidance. In his view, that means the market is reassessing AI economics and realizing that capex may reflect rising data-center costs and fear-driven competitive spending rather than strong ROI. He connects this to slowing earnings growth among the Magnificent Seven, weak AI monetization, and the possibility that OpenAI’s move toward ads signals subscription growth is not strong enough. Woo also argues that the broader market is being misread as a simple early-cycle rotation into cyclicals, small caps, materials, and miners. …
Tactically, the setup is vulnerable: Woo thinks the market is rewarding the wrong rotation and that any hotter inflation print or further AI capex disappointment can pressure Nasdaq again. He would treat strength in gold and cyclicals as suspect unless the policy backdrop truly improves.
Over the next few months, he expects AI leadership to remain under pressure unless earnings and monetization clearly re-accelerate. If Trump’s stimulus ambitions keep running into institutional limits and the Fed stays less dovish than hoped, the market may continue to favor defensive positioning over growth chasing.
Structurally, he thinks the world is moving away from a stable rule-based order toward more reserve diversification and more politicized capital allocation. In that regime, gold becomes a strategic hedge, while Bitcoin remains a policy-dependent speculative asset and U.S. tech faces a tougher return-on-capex environment.
Lower growth and higher rates is a deadly combination for the stock market.
Woo states this directly as the core macro setup behind his bearish view.
The AI trade used to be driven by AI capex, but the market now punishes higher capex guidance.
This is the interview’s central thesis about regime change in tech valuation.
OpenAI’s move to ads suggests subscription growth is too slow and monetization remains weak.
He uses the ad move as evidence that paid demand is not scaling fast enough.
Are you selling stocks right now, and what is your outlook for the S&P 500?
David Woo says he is definitely a seller and thinks something changed in the market. He argues the AI trade is under pressure, earnings growth is slowing, and valuations are stretched, which makes it harder for the market to keep rising.
Why do you think the AI trade is in trouble?
He says earnings growth is slowing, especially across the other Magnificent Seven names, and that higher AI capex is no longer being rewarded by the market. He also thinks revenue growth is still weak, so investors are reassessing the whole AI investment thesis.
Why do you think companies are increasing AI capex if returns may not be improving?
He says the market is starting to interpret higher capex as a sign that costs are rising, not necessarily that returns are rising. He adds that hyperscalers may be spending out of fear of missing the opportunity rather than confidence in easy profits.
Unlock the full claims, asset map, scores, related transcripts, follow-up questions, and AI chat — shaped around your portfolio, watchlist, favorite speakers, and risks.
