AI Infrastructure: Early Innings, Not Endgame

Editor’s note: There won’t be any commentary on 11/27 through 12/1 due to the Thanksgiving holiday and the office being closed.

AI Infrastructure: Early Innings, Not Endgame

• Past technology infrastructure cycles have peaked at 2% to 5% of GDP.

• The AI infrastructure TAM is expected to triple by 2030.

• Nvidia’s forward P/E is far below Cisco’s dotcom peak.

Every cycle has its skeptics, but history favors the disciplined…

There’s an old saying in the investment world that I’ve grown more fond of with age: “It’s not about timing the market, it’s about time in the market.” In other words, wealth comes from having a plan, sticking to it, and accepting that markets swing. With strategies like diversification, steady contributions, and dividend reinvesting, wealth compounds over time.

Take the S&P 500 Index as an example. Over time, it has averaged a 9.5% total return (dividends reinvested) since 1928. That means that by staying invested, you would double your money about every 7.5 years. And that includes periods when the market faced plenty of turmoil. Yet $100 invested at the end of 1928 would be worth around $590,000 today…

The past few weeks are a sharp reminder of why long-term investing matters. After dropping 4.4% from November 10–20, the S&P 500 has already clawed back most of its losses.

One driver of that whipsaw was speculation about the Fed’s rate cuts. After last month’s decision, several officials warned against easing further in December, sparking a selloff. But late last week, the outlook flipped when FOMC Vice Chair John Williams (dove, voter) suggested a rate cut was appropriate.

Today, though, I want to zero in on another source of turmoil—talk of a bubble in tech stocks. Earlier this year, the sector made up 36% of the S&P 500, surpassing the 34.8% peak during the dot-com boom. That triggered calls for a market top.

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