Prof G Markets

Why Markets Can’t Price AI

242 snips
Feb 10, 2026
Tom Lee, Fundstrat CIO known for crypto market calls, and Robert Armstrong, Financial Times tech commentator and newsletter author. They dig into Amazon’s capex shock and the tech sell-off. They debate AI’s unclear ROI and how markets struggle to price AI. They also unpack Bitcoin’s recent crash, deleveraging, and contrasts with Ethereum’s on-chain use.
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INSIGHT

Markets Struggle To Price AI

  • Markets can't price AI yet because the business models and moats are unknown.
  • Investors are flipping narratives daily, causing high volatility until clarity emerges.
ADVICE

Return To Fundamentals Amid Hype

  • Return to fundamentals and valuation when faced with narrative-driven volatility.
  • Prefer predictability: buy businesses you can forecast rather than speculative future moats.
INSIGHT

Certainty Commands A Premium

  • Investors currently pay a premium for certainty, bidding up staples and predictable businesses.
  • That certainty premium explains higher multiples for Walmart and Costco versus uncertain tech names.
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