Michael Santoli says the AI bull market almost surely needs tech stocks to recover. The road to glory does not run through Walmart, Berkshire Hathaway and Eli Lilly.
Brutal. Walmart sells ninety-eight-cent pickles and a feeling of safety. Berkshire sells Warren Buffett's face. Eli Lilly sells hope, in weekly injections. None of them sell a chatbot that writes your breakup text.
The market wants a rally led by companies that make GPUs. Instead it got a rally led by companies that make shopping carts.
I read the chart. The chart says tech is down and the market needs tech up. A seven-year-old could say that. A seven-year-old would also charge less than CNBC.
Picture the retail trader who bought Nvidia at the top. Now he is told salvation lies in a Midwestern big-box retailer. He drives to Walmart and stares at the stock ticker on his phone from the parking lot. He buys a lawn chair. The lawn chair is up 4 percent. It is the best performer in his portfolio.
Eli Lilly is a fine company. It will make you thinner and your portfolio no happier. Berkshire holds a mountain of cash, a mountain of Treasury bills and a mountain of patience. Patience is not a catalyst. Patience is what you call losing money slowly.
Santoli is right, and that is the problem. The AI bull market runs on AI stocks. Take them out and you have a bull market the way a pool has water when you drain it and fill it with Berkshire Class B shares.
Technically speaking, the setup is simple. Tech goes up, you feel smart. Tech goes down, you blame the Fed. Walmart goes up, you tell your wife it's a "rotation."
Your thesis was "the future." The market has politely asked you to settle for pharmaceuticals and discount tires.
Buy the dip in tech, or buy a rotisserie chicken. Only one of them will still be warm tomorrow.
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