Milk Road AI(@MilkRoadAI):Paul Tudor Jones says this market STILL feels like 1999 but the numbers tell a very different story. Jones described a two speed market that is perfectly bifurcated between everything adopting AI and everything that is not, with the two sides moving in opposite directions.He is right that the market is split, but the comparison to 1999 starts to fall apart once you look at valuations. At the March 2000 peak, the largest tech stocks traded at a market weighted P/E of about 126 times earnings but today, the Nasdaq 100 trades at roughly 22 times forward earnings, which is about in line with its 20 year average and nowhere near bubble territory. The bigger difference is that today's AI leaders are actually making ENORMOUS profits. $NVDA reported $96.2 billion of revenue in a single quarter, up 106% from a year ago, with 75% gross margins and $59.7 billion of net income. In 1999, a huge number of the companies driving the Nasdaq higher had no earnings at all, and the market was paying for promises instead of profits. The buildout is also being funded very differently, because $MSFT generated $182.9 billion of operating cash flow in fiscal 2026, more than enough to cover $115.9 billion of capital spending. And the demand behind that spending is already signed, with Microsoft, Oracle, Alphabet and Amazon now reporting nearly $2.4 TRILLION of combined backlog in contracted revenue that has not been recognized yet. The supply picture might be the clearest difference of all. In 2001, the United States was sitting on a massive fiber glut, and Merrill Lynch estimated that only 2.6% of the fiber capacity that had been laid was actually in use. Today, the problem is the exact opposite, because Micron says more than 75% of its 2027 output is already committed, Microsoft says its cloud growth is constrained by capacity through at least the end of 2026, and the New York Fed's John Williams said today that AI demand is pushing up chip prices with supply unlikely to catch up for years. A glut destroys pricing power, while a shortage creates it, and that is why memory and power companies are seeing prices rise instead of collapse. Good try to scare the market for the 7635363th time.

2026.10.13 22:14

Paul Tudor Jones says this market STILL feels like 1999 but the numbers tell a very different story. Jones described a two speed market that is perfectly bifurcated between everything adopting AI and everything that is not, with the two sides moving in opposite directions.He is right that the market is split, but the comparison to 1999 starts to fall apart once you look at valuations. At the March 2000 peak, the largest tech stocks traded at a market weighted P/E of about 126 times earnings but today, the Nasdaq 100 trades at roughly 22 times forward earnings, which is about in line with its 20 year average and nowhere near bubble territory. The bigger difference is that today's AI leaders are actually making ENORMOUS profits. $NVDA reported $96.2 billion of revenue in a single quarter, up 106% from a year ago, with 75% gross margins and $59.7 billion of net income. In 1999, a huge number of the companies driving the Nasdaq higher had no earnings at all, and the market was paying for promises instead of profits. The buildout is also being funded very differently, because $MSFT generated $182.9 billion of operating cash flow in fiscal 2026, more than enough to cover $115.9 billion of capital spending. And the demand behind that spending is already signed, with Microsoft, Oracle, Alphabet and Amazon now reporting nearly $2.4 TRILLION of combined backlog in contracted revenue that has not been recognized yet. The supply picture might be the clearest difference of all. In 2001, the United States was sitting on a massive fiber glut, and Merrill Lynch estimated that only 2.6% of the fiber capacity that had been laid was actually in use. Today, the problem is the exact opposite, because Micron says more than 75% of its 2027 output is already committed, Microsoft says its cloud growth is constrained by capacity through at least the end of 2026, and the New York Fed's John Williams said today that AI demand is pushing up chip prices with supply unlikely to catch up for years. A glut destroys pricing power, while a shortage creates it, and that is why memory and power companies are seeing prices rise instead of collapse. Good try to scare the market for the 7635363th time.

Milk Road AI@MilkRoadAI

2026.10.10 18:56

Just 10 stocks are responsible for 70% of the S&P 500's entire rally since March 30th. The S&P 500 has gained roughly 23% since its March lows, but the overwhelming majority of those gains have come from just a handful of companies. $NVDA alone accounts for 13% of the rally, followed by $MU, $AAPL, and $MSFT at 9% each, $AMD at 8%, and $GOOG at 7%. Meanwhile, the other 490 companies in the index collectively contributed just 30% of the gains and if you look closely at the biggest contributors, there's a pretty obvious trend. A HUGE portion of this rally has been driven by companies benefiting directly or indirectly from the AI infrastructure buildout. This is also why I keep saying that simply looking at the S&P 500 doesn't tell you the entire story of what's happening in the market. The index might be hitting new highs, but that doesn't necessarily mean the average stock is performing anywhere near as well. You could have a market where the S&P 500 is up more than 20%, yet plenty of individual stocks are barely moving or even trading in the red. And that's exactly what happens when the index becomes increasingly dependent on a small number of companies to generate returns. Personally, I still believe the broader AI infrastructure trade has plenty of room to run, especially as spending on memory, compute, networking, and power continues accelerating. However, this chart also tells us something important about the current market. Investors are becoming increasingly selective about where they're putting their money, and right now, a relatively small group of companies is capturing most of those inflows. As long as these companies continue delivering strong earnings and guidance, I don't see that changing anytime soon.

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