Saxo Market Call The US dollar bear case
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Feb 7, 2025 John J. Hardy, a seasoned Macro Strategist, explores the bearish outlook for the US dollar, emphasizing the urgent need for the US government to streamline its fiscal policies. He highlights the challenges facing major tech firms, particularly Amazon's heavy cloud investments, amid capacity constraints reminiscent of past tech bubbles. Hardy also discusses the implications of current economic trends on corporate earnings and the potential recession risks, all while addressing the competitive landscape of AI investments.
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Capacity Constraints and AI Profitability
- Amazon, Meta, Microsoft, and Alphabet face capacity constraints despite massive data center investments.
- This raises concerns about overinvestment and the profitability of AI.
AI Investment Parallels
- Parallels are drawn between current AI investments and past overinvestment in railroads and internet infrastructure.
- This raises questions about the long-term profitability of AI.
Amazon's Steady AWS Growth
- Amazon's AWS cloud business shows steady 19% growth for four consecutive quarters.
- This is slower than Alphabet and Microsoft, but Amazon maintains stable growth while others decline.