The Compound and Friends cover image

Tom Lee Strikes Back

The Compound and Friends

NOTE

AI Profits and Market Dynamics

As companies increasingly invest in AI technology, there's potential for improved profit margins, which could positively influence stock performance. Customer service-focused companies have reported reduced service times due to more intelligent AI bots. Despite growing earnings per share in the Russell 2000, stock multiples remain constrained, largely due to limited capital flow and a significant proportion of unprofitable companies—particularly in biotech—distorting earnings perceptions. Shifting focus to indexes like the S&P 600, which consists of profitable firms, may provide a clearer picture of market dynamics.

00:00
Transcript
Play full episode

Remember Everything You Learn from Podcasts

Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.
App store bannerPlay store banner