Where Are We In AI Boom? How About The GLP1 Boom? And Apple Wins Again

Good morning

Stocktoberfest is now just 3 months away in New York City. I hope you can calendar and join me October 5-7. The big topics will include The AI boom, but also the degenerate economy, the GLP1 boom, perps, prediction markets and brokerage 2.0. We have an incredible golf outing planned as well as well as a night of comedy.

A couple of charts that I would be discussing if the event was this week, include the supply that Wall Street is creating for all this AI demand. Eventually Wall Street gives people and their FOMO what they ask for….

Another topic related to the ‘degenerate economy’ is all the ‘leveraged’ ETF’s being issued - now 33 percent of all ETF’s and 54 percent of all theses ETF’s use derivatives. I don’t think most investors fully understand what they own.

Onward…

Apple ( $AAPL ( ▼ 0.29% ) ) has quietly closed at all-time highs this week and the second largest company in the world behind $NVDA ( ▲ 4.03% ) . They have not been an AI ‘spender’ and I think the market is waking up to the idea that one way to win the AI game is NOT TO SPEND. In fact, being one of the biggest customers in the AI food chain has created an inflation ‘flash point’ as they were ‘forced’ to raise prices because of all the memory and chip shortages. Screw rising egg and meat prices, the iPhone is our ‘algo’ and ‘anger’ protein and in the face of Apple raising prices, South Korea woke up as did Micron and announced supersizing capacity plans. I am all for this as a customer and user of technology but as an investor we must pay attention to all this supply getting sped up.

Apple also announced a huge lawsuit against Open AI for stealing secrets. They dropped this Friday and it will send some shockwaves through the system. I would not touch Open AI with my enemies money and I do wonder how Sam Altman survives all this fresh drama.

My own ‘degenerate economy’ index continues to perform very well. Below are the holdings and performance charts. It has been free to copy since the beginning and has very little turnover. My big mistake over the last three years was not having a heavier weighting of semiconductors and not making cyber security a core holding. I have a high cash position right now and plan to rectify that as dips develop…

Next up…how about Eli Lilly ( $LLY ( ▼ 2.33% ) ) and the GLP 1 trend?

Software ate the world until AI started eating software and the internet. Now Eli Lilly is eating the food industry.

While I am sure Eli Lilly will benefit from AI, the stock has not needed AI to 10x the last 5 years. Eli Lilly has been the antidote to the poisonous American food industry and a new addition to my index. The chart below show their stock performance versus the fast food stocks the last 3 years.

Eli Lilly has perfected a direct to consumer model for their drug. I would not be surprised if Eli Lilly bought or launched their own food products that best suit customers taking GLP1’s.

Finally, let’s catch up on AI.

I continue to stay out of the ‘bubble’ discussion. It is a boom that will no doubt face many crisis of too much supply and confidence.

I am staying focused on what products help me, Stocktwits and our portfolio companies stay leaner, move faster, get to profitability sooner and ship better products.

Simon Taylor who writes Fintech Brainfood had a good piece posing the question how can it be a bubble when ‘the biggest capital boom ever measured has no unsold inventory’. Like me, he is not sure how big this boom or bubble gets.

While as Simon says ‘you can’t overbuild something that is sold out’, we are seeing an insane transfer in free cash flow taking place between the Facebooks, Googles and Amazon’s to the semiconductor companies…

As Grok points out on behalf of the CEO’s doing all the spending…this will pay off by 2029. Of course, nobody really knows it’s just a massive bet that we will find out soon as cards get flipped…

It is getting easier to find the AI ‘bearish’/‘bubble’ callers as 2026 progresses.

The pied piper of the AI bubble club is Ed Zitron who is having his 15 minutes of fame these days appearing on every podcast and business show. His latest essay is titled ‘Let AI Burn’. The world needs Ed Zitron’s, but standing in front of this tidal wave of cash has been a terrible strategy and timing the event that creates a full unwinding is too hard.

I found Ben Evans recent piece the most reasonable explanation of the game happening on the field right now as ‘open source LLM’s’ are capturing more market and mindshare over the frontier models like Open AI.

Have a great Sunday.