Slate Money Schrödinger’s Equities
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Jan 3, 2026 In 2025, the US stock market gained but left investors feeling underwhelmed compared to international performance. The role of AI in these gains sparked an engaging debate. Surprisingly, Mexico emerged as a winner during the Trump trade war, capturing supply chains. M&A activity skyrocketed to $2.4 trillion, while Warren Buffett's impending retirement raised questions about Berkshire Hathaway's future direction. The hosts also pondered Tesla's valuation despite declining deliveries, showcasing the unpredictable nature of the market.
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U.S. Gains Felt Like Underperformance
- The S&P's strong 2025 return felt disappointing because many international markets outperformed the U.S. and the dollar fell.
- Concentration in mega-cap tech amplified perceptions that gains were narrow and AI-driven.
AI Hype vs. Real AI Stocks
- Many observers attributed 2025 stock gains to AI, but Felix argues only a few pure-play AI stocks truly drove the story.
- NVIDIA and hyperscalers stand out as the real "AI stocks," while most mega-caps merely market AI narratives.
Google Repositioned As An AI Contender
- Google's stock rally reflected belief in its AI capabilities and infrastructure despite earlier fears AI would hurt search.
- Market perception shifted to view Google as a viable AI contender, boosting its valuation.