Fears over higher rates are not the main concern, says Josh Brown

  • The biggest risk to stocks in the second half of this year could come from corporate AI spending
  • If spending on AI products stops or normalizes, Wall Street would be taken off guard
  • Nvidia is leading the parade down Main Street and its stock story needs to hold up for the market’s earnings growth to be sustained
  • Earnings growth of 10% is expected this year, with half of that from six stocks tied to AI spending

Fears over higher rates have been causing some turbulence in the stock market, but according to Josh Brown, CEO of Ritholtz Wealth Management, the biggest risk to stocks in the second half of this year could come from corporate spending on artificial intelligence (AI). Brown warns that if spending on AI products, particularly those from Nvidia, stops or normalizes, it could catch Wall Street off guard. He explains that Nvidia is leading the way in AI spending, and if its stock story falters, it could impact the earnings growth of the entire market. Brown points out that while he is bullish on AI in the long term, the spending on AI is not expected to grow at a linear rate without any breaks. Currently, earnings growth of 10% is expected this year, with half of that growth coming from six stocks tied to AI spending. However, if any of these stocks decide to pull back on their AI investments, it could have a significant impact on the market. It’s important to note that none of this is happening yet, but it’s a risk that investors should be aware of.

Factuality Level: 2
Factuality Justification: The article contains a lot of irrelevant information, digressions, and unnecessary details that are tangential to the main topic. It also includes opinions presented as facts and lacks in-depth analysis or factual reporting.·
Noise Level: 3
Noise Justification: The article provides a detailed analysis of the potential risks associated with AI spending in the stock market, particularly focusing on Nvidia. It includes insights from the CEO of Ritholtz Wealth Management and discusses the implications of a slowdown in AI spending. The article also covers market performance, asset performance, and key events in the tech industry. However, there is some noise in the form of irrelevant information about stock tickers, tech earnings, and random reads that do not directly contribute to the main analysis.·
Public Companies: Nvidia (NVDA), Amazon (AMZN), Microsoft (MSFT), Apple (AAPL), Salesforce (CRM), HP (HPQ), Tesla (TSLA)
Key People: Josh Brown (CEO of Ritholtz Wealth Management), Michael Batnick (Managing Partner at Ritholtz), Elon Musk (CEO of xAI), Nelson Peltz (Activist Investor), John Williams (New York Fed President), Lorie Logan (Dallas Fed President)

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Financial Relevance: Yes
Financial Markets Impacted: AI spending and related stocks (Nvidia, Microsoft Azure, Amazon Web Services)
Financial Rating Justification: The article discusses the potential impact of AI spending on financial markets and individual companies such as Nvidia, Microsoft Azure, and Amazon Web Services. It also mentions the influence of AI spending on the overall earnings growth of the market.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.·

Reported publicly: www.marketwatch.com