Can AI Keep Driving the Stock Market Higher? Callie Cox Explains (EP.220)

Sep 3, 2025

Join Callie Cox, Chief Market Strategist at Ritholtz Wealth Management, as she dives into the impact of AI on the stock market. She breaks down why Wall Street's AI optimism clashes with economic realities. Callie shares insights on how concentrated earnings growth in tech presents both opportunities and risks, and draws lessons from historical giants like GE. Discover which sectors beyond Big Tech might benefit from AI adoption and learn how to differentiate between hype and true innovation for long-term investing.

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INSIGHT

Market = Reality Plus Expectations

The stock market reflects reality plus expectations and can diverge from the real economy for long periods.
AI expectations are being priced into big tech even as macro growth shows cracks.

INSIGHT

AI Spending Helps But Isn't The Whole Economy

Fundamentals are driving part of tech gains via heavy business spending on data centers and computing.
That corporate spending is small relative to consumer spending, so AI alone won't immediately power overall GDP.

INSIGHT

Tech Masks Broader Corporate Weakness

Tech now represents a large and growing share of corporate profitability and can mask weakness in other sectors.
Relying on one sector to carry earnings growth is fragile and historically unsustainable across cycles.

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AI has fueled massive gains for Big Tech, but can one sector really carry the market forever?

In this episode, I’m joined by Callie Cox, Chief Market Strategist at Ritholtz Wealth Management, to explore the tension between Wall Street’s AI-fueled optimism and the realities of a slowing economy. We discuss what history teaches us about dominant companies, how to spot the difference between hype and durable innovation, and what long-term investors should really be watching.

Listen now and learn:

► Why “the stock market is not the economy” — and why that matters in today’s AI-driven rally.

► How concentrated earnings growth in tech creates both opportunity and risk.

► What history (GE, dot-coms) tells us about the limits of dominant companies.

► Which sectors beyond Big Tech could quietly benefit from AI adoption.

Visit www.TheLongTermInvestor.com for show notes, free resources, and a place to submit questions.

(02:22) AI optimism vs. a shaky economic backdrop (05:59) Can tech alone carry market earnings growth? (09:37) Dreaming vs. reality in AI investing (15:36) Lessons from GE and what they mean for Big Tech (19:29) Who really benefits from AI adoption? (21:53) The risks of concentration in the Magnificent 7 (24:51) Balancing story vs. evidence as a long-term investor (29:15) Early signs of real AI adoption and productivity gains (32:04) Everyday use cases of AI in real life

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