Cracks in the AI Trade, A Content Clash, and The Key Questions for SpaceX 10/20/26

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Kelly Evans (0:45)

You're listening to The Exchange. Here's today's show.

Thank you very much, Scott. Stocks are rising today, but this time, it's the Dow and the Broad S&P leading the way, while the NASDAQ is barely higher and the tech trade continues to wobble. I'm Kelly Evans and welcome to The Exchange. Shout out there to the small caps too, the Russell 2000s of one and a half percent. But in terms of the Dow earnings from 3M, giving that a boost today, the company raising its guidance and expanded its relationship with Amazon to deploy optical connectivity and data centers. The S&P, as you can see, they're up a third of one percent, and the NASDAQ is trying to stay green. CoreWeave is also trying to rebound, up about two percent right now off-session highs, also off-session lows. Other NeoCloud and software names seeing a little bit of a bounce. Watch the SOX Semi Index, trying to snap an eight-day losing streak, and only up about half of a percent right now. That's that third line item on your screen. And also keep an eye on WTI, reversing lower today on reports that Iran and US talks continue. But those reports are being called into some question, and you can see crude oil prices are now moving higher by a third of one percent, in fact nearly back to $104 a barrel. But let's begin with the AI trade a little calmer on the surface today. But there are reports that Amazon is sitting on stacks of unsold GPUs. Doug Clinton is the CEO of Intelligent Alpha. He says, we are watching a game of AI musical chairs right now. Love that kind of way to think about it, Doug. Welcome. And so for you, then, this is more about which players survive and less about calling the whole cycle into question?

Doug Clinton (2:22)

I think that's right, Kelly. I mean, I think you think about bull markets when they are driven by technological innovations like we have here with the AI trade.

Nobody wants to be the last person standing. I think everybody is hyper aware of the possibility of a bubble. I don't think we're in a bubble right now. I think that stocks are very much supported by fundamental reality. But I do think that when we hear these reports last week, OpenAI, for whatever reason, people were disappointed with some of the revenue numbers that came out. I think that was just kind of the excuse to say, look, the AI trade has been hot. People have made some money, particularly coming off of the July lows. And I think that just gave traders and investors a reason to kind of sell off a little bit, even though the fundamentals for AI remain strong.

Kelly Evans (3:06)

What fundamentals would you point to? Because some say the kind of cost of renting older GPUs is still rising as a sign that the market is still tight, no matter what these reports are about, whether Amazon has inventory sitting around. What can you tell us?

Doug Clinton (3:20)

It is, I think you look at Anthropic. Their revenue grew 45% quarter over quarter, and that's off a mid-teens billions revenue base. So you're talking about still very strong growth, Q2 to Q3.

Microsoft has talked about $80 billion in Azure demand that they can't fill because they don't have power. And I think the biggest piece for me, Kelly, is you think about Grokbot, you think about Muse from Meta, these new agentic platforms that just came out basically a month ago. They only have a few million users, but I think those products are destined to have billions of users in the next five to 10 years. And so think about the infrastructure that we still need to support that ultimate end demand in the future.

Kelly Evans (4:00)

What happens though? There's kind of some data making the rounds, Doug, about how after initially being downloaded, Muse isn't used as much as other social media platforms. Do we know for certain that widespread adoption is going to happen and going to keep fueling demand?

Doug Clinton (4:16)

I can tell you from my own personal use case, I've tried Muse, I've tried Grokbot, I've tried DOT from OpenAI and a few of the other personal assistants. And once you really, I think, understand how to use them really well for your own use cases, they do become addictive and it is hard to go back to old traditional workflows. And so I wouldn't really comp these two traditional social networks, which I think very much are more entertainment driven, where people just want to kind of spend time. It's very easy to get demand and attention from videos and different content like that. For these tools, it's really about productivity, getting things done and in some cases, I think maybe even having a companion, depending on how people set them up. So I think there is a little bit more of a learning curve here than social media. But over time, I think people will find they make their lives easier and they will spend a lot of time with them as a result.