A $20B Blowup. A War-Sized AI Bet. Was the Bottom Just a Margin Call? | Last Call

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We are excited to announce the launch of a new podcast, Last Call. While many market rap shows can cover the same ground, we wanted to try something different. We wanted to get away from what the market did in the past month and instead bring in some of our friends who offer truly unique perspectives and data, and we wanted to have some fun along the way. In this episode, Jim Paulsen explains why restrictive policy may still hit markets, Ben Hunt updates his World War AI thesis, Brent Kochuba breaks down the flows behind the situational awareness blowup, and Cameron Dawson and Dave Nadig air their market grievances. You can subscribe to Last Call on all major podcast platforms using the links in this episode description. Thank you for listening. We hope you enjoy the show.

**Matt Zeigler** (1:38)
You're watching Excess Returns. This is Last Call, our monthly market recap show where we get a handful of our favorite people to talk to. Pull them in for a quick hit on what they're reflecting on from the month of the rear view mirror. Jack Forehand is with me. Jack, how are we doing?

**Jack Forehand** (1:55)
We're doing good. You know, Matt, if we were looking at the overall indexes, you'd say, you know, it's been a nice smooth ride. We're all having no problems. And then you look behind the scenes and it's like, there's turbulence in our private jet, man.

**Matt Zeigler** (2:05)
Turbulence in the private jet, spoken like a true small cap value guy.

**SPEAKER_1** (2:09)
You feeling pretty good again this year?

**SPEAKER_2** (2:10)
I mean, you were feeling pretty good.

**Jack Forehand** (2:12)
Yeah, I mean, it's small cap value. You used the turbulence, man. There's not a, like this whole idea that these companies are cheap so they're not vulnerable is definitely not the reality of the situation. But it hasn't even been like, my small cap value has been okay recently. The turbulence has been elsewhere.
Turbulence has been kind of in some of the semi stuff and in some of this high beta tech stuff. And yeah, despite the fact that if you were looking at the indexes, you'd never know it. Like some people behind the scenes are probably having a pretty wild ride right now.

**Matt Zeigler** (2:38)
A pretty wild ride and I, dispersion is back, like rotation is back. This is, this was a crazy month culminating on what had picked up in the month prior, where we saw the semis continue to get wrecked. We saw a bunch of high beta getting punched in the teeth. We saw some mitigated damage in the S&P. We saw small caps doing all sorts of exciting small cappy things to your point. But it feels like we actually have some rotation going on here for the first time in a minute.
Yeah.

**Jack Forehand** (3:06)
One of the ways I look at this is like when you have these innovations, like the more of the value that's like way out in the future, the more uncertainty you have around it, the more you're going to have volatility. Because if you think about it, and people aren't thinking about it this way, obviously, like the DGEN's treating and stuff are thinking about this way. But like that terminal value with AI is so, so important because we just don't know what it is. You get these announcements and you just get massive, massive reactions to it because it changes. Remember Deep Seek back in the day?

**SPEAKER_2** (3:31)
I love that that's back in the day. Back in the day or something.