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AI is used as a partial justification for the Fantastic 7 melting up. But aside from Nvidia (where the revenue benefits are clearly already more than priced in!) is it really going to move the needle that much over the next decade? Companies like Google, Microsoft, Apple are already making around $200-$400BN revenues a year. Even if revenues from generative AI grow at a rapid clip similar to Cloud from a low base it would probably take many years to account for more than a fraction of their revenues. As for traditional AI it is really nothing new and these companies already have sophisticated data analytics capabilities that are already contributing strongly to their huge revenues so while it might improve the value proposition for someone like Microsoft especially for upgrades etc and perhaps allow companies like Google and Facebook to target their advertising even more effectively will it generate tens of billions of new revenues for them? And generative AI feels a bit gimmicky at the moment e.g. Bing has a new AI co-pilot etc but it has made no difference to me and I still use Google and most of my friends are asking Chat GPT silly questions and laughing at the answers and more techy people are delighting in finding ways to trip it up. And you also have to wonder to what extent it will start to cannibalize their existing main revenue streams which are already starting to look very mature and will be difficult to maintain especially in a weak economy where the vast majority of their customers are struggling. Also there seems to be an assumption that mega-caps will be the main beneficiaries when history would generally suggest that while they clearly have a massive advantage in terms of making investments, buying up promising start-ups, hiring the best talent etc. so did IBM and Microsoft back in the day (before Microsoft rediscovered its mojo) and Google and Meta emerged AFTER the tech bust. So often with a new technology it favours more innovative entrepreneurial companies that don't have to worry about their existing businesses being cannibalized and have a fresh perspective. Even if there is an incredible long term opportunity in the near term non-AI revenues are clearly going to come under challenge especially if we are heading for a hard landing. Apple, Facebook, Google and Amazon all have cyclical revenues. Tesla is an automobile company and autos are famously cyclical. And even in a soft landing that the Fed are predicting whereby GDP growth is only 1% or so for the year that will translate into single digit growth figures which rarely goes down well when investors are paying 30-60x earnings expecting double digit revenue and earnings growth as far as the eye can see.