UBS On-Air: Market Moves Signal over Noise with Ulrike Hoffmann-Burchardi
Nov 10, 2025
Dive into the latest market trends as AI demand shapes earnings reports. Discover how government-backed debt discussions affected the Nasdaq and raised concerns for AI companies. Unravel the intricate relationship between infrastructure build-outs and capacity cycles. Explore the significance of aggregate token usage as a critical demand metric. Plus, get insights into labor market signals affecting Fed rate expectations and signs of a potential end to the U.S. government shutdown. Optimism persists, but vigilance is key in the evolving landscape of AI.
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Debt Concerns Drive Recent Market Moves
- Markets are increasingly worried about how AI CapEx will be financed and whether debt will create systemic risk.
- Debt-funded AI CapEx remains under 15% of US AI data center spending, but leverage could amplify booms and busts.
Buy-Side Lessons On Leverage Cycles
- Ulrike draws on buy-side experience watching leverage-driven cycles like subprime and China property booms.
- She warns debt can amplify CapEx booms and force painful balance-sheet repair when cycles turn.
Compute Capacity Can Flip From Crunch To Glut
- A possible mismatch between compute demand and supply raises the chance of a sharp capacity air pocket followed by a glut.
- Data center build times of two to three years and uncertain demand projections often cause oversupply after initial crunches.