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Bob Elliott, co-founder and CIO of Unlimited, said that while the rerating of the AI trade appears significant at close range, a large part of the market is still priced for strong nominal growth. He added that this is occurring even as asset price rises critical to that outcome are fading.
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Elliott previously noted that the recent rise in U.S. bond yields is consistent with expectations and current market data, describing the trend as within the range of normalcy in recent commentary. In addition, he has warned that the market’s optimism on AI hinges on continued spending growth, while actual expenditure is starting to level off, as he pointed out in an earlier warning. These observations frame Elliott’s current assessment of market pricing and growth expectations.