Our Final Day in Vegas: How the AI Bull Market Ends
Day 3 of our Stansberry Research conference... Josh Brown headlines Alliance Day... One of his biggest concerns about the market... Healthy skepticism about AI... What to watch for... Gold $12,000?...
Don't forget to smile...
Ritholtz Wealth Management CEO Josh Brown ended his headline presentation at our Stansberry Research conference this morning with this message: "It's OK to smile."
We're in the midst of one of the greatest bull markets of all time, he said, and not just because stocks, bitcoin, and gold are going up.
"It's because of the different ways we have to take advantage of these things," continued Brown, the prominent CNBC commentator, "how low-cost it all is, how seamless, how quickly we can implement investing strategies."
So put money to work and enjoy the returns, and smile about it.
But that doesn't mean Brown doesn't have concerns about the market, too.
"Of course, there's risk. There always is," he said on stage during Alliance Day, the third and final day of our conference, at the Encore at Wynn in Las Vegas. And one of his top concerns right now is the increasingly high expectations for AI stocks, like Nvidia (NVDA).
He pointed out that Nvidia's earnings have grown so fast, the company's forward price-to-earnings ratio is actually cheaper than it was three years ago. All has been well...
But what worries him about Nvidia now...
Brown warned that Wall Street analysts are starting to catch up, and they don't want to look bad anymore when Nvidia inevitably (so far) beats earnings. So they've raised their expectations for the company's growth even further.
What if Nvidia merely meets expectations, or even misses on a quarter for a change?
Nvidia makes up a big chunk of the market-cap-weighted S&P 500 Index, and the AI trend has been powering this bull market since the end of 2022. So if Nvidia ever posts a "disappointing" earnings report, a resulting sentiment turn would pose a risk to the entire AI ecosystem and the stock market in general.
Brown said this is one of his top three concerns heading into 2026.
After his talk, I (Corey McLaughlin) also had the great opportunity to sit down with Josh to record an upcoming episode of the Stansberry Investor Hour, and we covered a lot of ground, including about AI.
I asked him if he thought we were headed toward an AI bubble, and he gave me a quick "yes."
Some healthy skepticism on AI...
Brown's not the only one raising red flags... The idea of the AI boom turning into a bubble is one that has made the rounds in the finance world lately – and we've discussed it in these pages the past few months. Various presenters this week covered the subject...
During his on-stage presentation on Monday, Stansberry Research senior analyst Brett Eversole took a positive attitude.
Brett said that what has happened with AI spending so far has been healthy.
The big tech companies like Meta Platforms (META), Alphabet (GOOGL), Amazon (AMZN), and Microsoft (MSFT) have made the most capital expenditures ("capex") on AI in the past few years. This includes $300 billion in the past 12 months alone. And Brett notes they can afford to do it... and their free cash flows have still been growing.
"Capex mega-cycles typically end with debt-fueled malinvestment," Brett said, "but this is not the debt-fueled portion of a capex cycle. This is the healthy portion of a capex cycle."
However, he sees the "beginning of the end" of this healthy period. A warning sign is OpenAI's $300 billion commitment to buy cloud services from Oracle (ORCL), Brett said. To meet these AI-infrastructure commitments, Oracle may need to "go cash flow negative" and borrow around $100 billion over the next three to five years. So, Brett said...
Oracle is the company that could become the negative bellwether for this AI trade... Overall, we are in the middle of a capex boom. Big Tech can afford to spend more, but Oracle is one of those companies you need to watch. At some point they're going to announce a big deal, and instead of the stock going up 20%, they're going to go down 20%. And that's going to be the market telling everyone, "We don't like this anymore." But we're not there yet.
Similarly, David Daglio, an adviser at TwinFocus, told attendees that the idea that data-center business will "earn superior returns" over time is a myth. Rather, he said data centers reminded him of the "crummy" airline industry...
Incredibly high capital expenditures. One or two key suppliers that make all the money – Nvidia in this case. [The parallel to airlines] might be Boeing or Airbus... What do airlines do? Move people from A to B... Data centers do the same [with data].
The difference is that, based on Daglio's research, it costs tech companies twice as much capital (as a share of revenue) to add AI infrastructure... versus airlines' smaller investments in their businesses.
While many analysts project a lofty return on invested capital from data centers, Daglio projects more like 10%. As he put it during his presentation... "It's just a bunch of hardware and stuff that's been commoditized."
As we've said before, AI is an incredible technology that will change industries everywhere and the way people work. But the tech is incredibly expensive to make and power, even as the path ahead for making money from it is unclear.
AI spending rolls on with enthusiasm for now. But take note: We're hearing more and more skepticism of the high expectations.
Take Dr. Peter Diamandis, an entrepreneur with his hands in various startup tech businesses (like the humanoid robots). In his conference presentation yesterday, he said capital is being sucked into AI in "unhealthy" ways... and that market expectations for AI are due for an "adjustment" – downward – in the next one to three years.
Don't get caught off guard.
Elsewhere, from Alliance Day...
This morning, attendees also heard from Carson Block, the chief investment officer of Muddy Waters Capital, who talked about the mining business... and Crypto Capital editor Eric Wade. And, after Josh's presentation, more of our editors took center stage with exclusive picks for the Alliance members in attendance, and more.
The popular "Bull, Bear, or B.S." panel returned, with our Director of Research Matt Weinschenk peppering a panel of editors with news items and market observations, and our analysts calling the subject bullish, bearish, or B.S.
They covered the surge in spending on AI infrastructure, too... and Stansberry Research senior analyst Gabe Marshank was quick to call "B.S." on it.
Gabe argued that companies are getting credit for their spending plans without the spending hitting their income statements. And he's bearish on the companies that are pledging all this money.
There isn't a clear business model that will come out of all this spending, he said. In the long term, Gabe expects that a viable business model will develop, but we don't have an idea of what that will look like just yet. In the meantime, companies are throwing all their money at AI without knowing how it will turn out.
Gold $12,000?...
In addition to AI, our conference was abuzz about gold this week.
In a breakout session Tuesday morning, Seabridge Gold (SA) founder and CEO Rudi Fronk shared insights on the gold market as a whole... and where he thinks the price could head next.
Gold has been on a tear this year, up more than 50% even with a pair of substantial down days yesterday and today. And yet, Rudi noted that gold's 2025 performance is less than half of what it was during its best year ever in 1979.
And like a few presenters have said this week, Rudi believes gold can still head higher from here. With the dollar deteriorating, folks are coming back to the realization that gold is the best money and has an important role to play in the global financial system.
In the U.S. specifically, the end of the gold standard in 1971 has led to a huge explosion of credit and money supply. As Seabridge Gold explained in its most recent update on the gold market...
The US could have kept the principle of a gold exchange and allowed the gold price to rise but the administration feared the dollar would lose its status to gold. From that moment, the unbacked dollar supported an exploding credit market that grew 10 times faster than the US economy, expanding an extraordinary 226 times from 1971 to 2024.
That debt is not going anywhere, and the money supply is still soaring. So folks need gold to protect their wealth. Big institutional buyers like central banks are focused on physical gold, too.
But at current prices, not enough gold is being produced to meet demand. So gold only has one way to go from here... higher.
Rudi believes that gold can hit $12,000 per ounce over the next three to five years – almost tripling from today's price.
That would mean even bigger gains for shares in mining companies... like Rudi's.
With that, we're winding down our stay here in Las Vegas...
Tonight, we'll have a closing reception and then travel back east tomorrow. And in tomorrow's Digest, we'll feature some "leftovers" that we didn't get to share over the past few days.
New 52-week highs (as of 10/21/25): Allegion (ALLE), American Express (AXP), Cencora (COR), Donaldson (DCI), Western Asset Emerging Markets Debt Fund (EMD), Gilead Sciences (GILD), Mueller Industries (MLI), VanEck Morningstar Wide Moat Fund (MOAT), Roivant Sciences (ROIV), and SPDR Portfolio S&P 500 Value Fund (SPYV).
In today's mailbag, thoughts about AI and robots, which we wrote about yesterday, and more feedback on the late Harry Browne... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"On the subject of AI and robots, all the talk is so breathless about how great it will be with labor saving and removal of dull and boring jobs. Actually, most people's jobs could be considered dull and boring, but they pay the bills. When AI and robots put millions of people out of work then where is the money going to come from to grease the wheels of the economy? The result will be some kind of deflationary collapse like the 1930s..." – Subscriber S.J.I.
"I was a subscriber to [Harry Browne's] newsletter; he was brilliant. You can read his books written last century and they are not dated at all; could have been written today. I have one which he signed for me. I voted for him and am sorry he died too soon." – Subscriber Jerry F.
All the best,
Corey McLaughlin and Nick Koziol
Las Vegas, Nevada
October 22, 2025