AI Held Up Stocks. What’s Holding Up AI?

Global liquidity cycles and the sustainability of AI-driven market growth define the current economic landscape. Liquidity growth has peaked, creating choppiness in risk assets as capital shifts from financial markets to real economy projects. AI capital expenditures face a significant revenue gap, with growth trajectories shifting from parabolic to linear, raising questions about margin normalization and the law of large numbers. Systemic risk persists through a massive debt maturity wall, where capital markets function primarily as refinancing mechanisms rather than sources of new investment. Households currently maintain consumption levels through "dissaving," fueled by equity and real estate wealth gains, yet this remains highly sensitive to market volatility. Investors seeking diversification must balance fundamental tilts, such as equal-weighting or international exposure, against the psychological challenge of deviating from dominant benchmarks like the S&P 500.