1. The chip trade is crowded.

The latest Bank of America fund manager survey confirms what we were thinking.

A record 82% of respondents think the AI trade is the most crowded…but roughly half still say we're not in a bubble.

2. The year the cash runs out.

Aggregate capex as a share of operating cash flow reaches 100% in 2026. Above that line, by definition, every marginal dollar of capacity is funded not from internal cash but from the balance sheet - debt or equity. Past 100% of cash flow, accelerating capex means borrowing more, faster, every quarter, against a rating that only has so many notches left. Hyperscaler debt issuance has to climb steeply over the coming year - the bond market becomes the marginal funder of the entire AI build-out.

3. OpenAI’s delayed IPO matters far more than the market initially understood.

The IPO is the refinancing of last resort - the final, deepest teaser into which the whole edifice expects to roll once the private rounds can no longer carry the burn. Which is why news of OpenAI’s delayed IPO matters far more than the market initially understood.
The terminal refinance carries a trap the private rounds did not. To reach the public pool the borrower must file an S-1 - and the S-1 discloses exactly the fragility that made the refinance necessary: audited losses, customer concentration, the full $600 billion-plus of take-or-pay obligations laid out for any reader. The document that unlocks the capital is the same document that prices the risk.
OpenAI needs the market’s money and cannot fully afford the market’s scrutiny - the bind of a company whose story is better than its statements.
Who is exposed?
OpenAI is the single largest customer - by direct contract or one counterparty removed - of very nearly every name that sells into the AI build. Oracle’s contracted backlog is more than half OpenAI; CoreWeave’s book - once its Microsoft-routed capacity is traced through to the underlying tenant - runs to roughly two-thirds OpenAI; SoftBank’s commitments, through Stargate, are almost entirely OpenAI.

4. There is life beyond chips.

The Broadening of the rally has resumed after a pause during the Iran conflict.

“Typically, in a new economic expansion, earnings growth turns out to be much better than expected as revenue growth returns to increasingly cost-efficient companies – i.e., classic operating leverage. The stock market began to anticipate that trend starting in November 2025. The Iran conflict in late February temporarily interrupted the broadening trade, but as oil prices passed their peak, the trade has regained traction.”

Below: signs of “broadening” when the equal wighted S&P outperforms the capital weighted.

5. Asia’s defense spending is shifting into a higher gear.

With geopolitical tensions having risen significantly in recent years, Asia’s defense spending has shifted higher, and is estimated to rise 10% Y/Y to US$700bn, or 1.8% of GDP – the highest level in more than 30 years.

Notably, however, as a percent of GDP, Asia’s defense spending remains below the US and Europe.

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