Tech and AI continue to drive S&P 500

Added: 2026-06-03

[00:00:00]Meanwhile, shares of Nvidia are trending up on news of a new chip to bring AI directly to computers. It's another sign that tech continues to drive the S&P 500. So, for more, let's bring in Jamie Wise, CEO at Periscope Capital. It's great to have you join us. Thanks so much.

[00:00:16]>> Hi Lindsay, thanks so much. Nice to be here with you.

[00:00:18]>> Yeah, so this news of Nvidia making a new chip designed to power personal computers, how meaningful is this new development in the ongoing kind of AI story?

[00:00:28]>> Well, it's just another leg in it. And really, the way we think about things here at Periscope isn't so much directional, but the volatility around the narratives in the market. And AI is a big narrative, as you know, in the market. And this is just another uh data point for us all to consider in that narrative. And it is definitely leading the market today, but it leads it both ways. And we've seen that, right? There's lots of anxiety out there around the spend around AI, and will it be monetized in a certain way? Uh so far recently, we've had some constructive attitudes around that, but we certainly saw the anxiety around that just a few months ago.

[00:01:05]>> Right, so what does Nvidia have to do when it comes to this plan in particular to keep investors feeling positive moving forward, do you think?

[00:01:11]>> I don't think the company it's a company-specific thing. I think it's just sentiment that's really driving these markets. And every single day, investors get a new data point that they can feel comfortable around and look through some of the other narratives that keep popping up in markets and causing anxieties. And right now, on the equity side at least, we're living through a period of relative calm and positive sentiment, but the cross-asset volatility behind the scenes really stays uh front and center for us, and that's what's driving a lot of our positioning.

[00:01:40]>> We're also watching for some big kind of mega IPOs this year, both from Anthropic and OpenAI. Those are just two companies, but to speak about those two companies in particular, how do you think those kind of mega IPOs will reshape the markets?

[00:01:53]>> There's no question it'll have a big impact on the market, but unclear whether that will be a positive or negative impact. There's going to be lots of positioning that managers will have to um get in front [snorts] of ahead of those IPOs, whether that's rebalancing their portfolios to account for them, or even on the more passive side of the market where um they are going to likely be a part of the major indices sooner that rather than later. Lots of those index companies are making those changes to their index guidelines to allow for those things to happen. So, there was going to be a lot of churn in the market as those large IPOs come to be and uh to be determined how the volatility will react around all those things.

[00:02:33]>> Is there one that you're more interested in than the others in terms of how things play out? When it comes to some of the big IPOs?

[00:02:39]>> really Yeah, our approach here really isn't on the fundamental side to be directional around these things. It's recognizing that there's a lot of different narratives that have been happening in the market and wanting to build things portfolio construction wise that really offer convexity, that offer optionality to different types of outcomes. Resiliency is very important to us and we recognize that and expect continued pockets of volatility to emerge in the market, but also understanding that those volatility pockets can be to the upside and to the downside. So, we really try and position ourselves using options and other resilient forms [snorts] of strategies and things that have convexity characteristics to them to allow for returns to be able to be harvested in either type of environment without having to take a big directional view.

[00:03:26]>> We've seen tech AI stocks carrying the S&P 500 at the moment. Given the kind of volatility that you were talking about beneath the surface, uh is this leadership from tech AI sustainable, do you think?

[00:03:37]>> Well, it's very interesting to talk about that cuz when you look at the Mag 7, they've actually underperformed the market this year. And so, you know, you've had this rotation away from Mag 7, which many people a year ago thought might not be possible or the market would really take a beating if that were to happen, but we found other leadership. Right now, it's certainly in chipmakers and semiconductors. Earlier in the year, it was more widespread. So, I think that's a really interesting storyline to follow here is can the market diversify away from either tech or the Mag 7 and continue its march onward. Again, something that we focus on a lot here is, you know, just looking at what correlations are in the market, how high dispersion is, and how interesting that we have very low correlation, very high dispersion in the underlying market, yet they've grinded higher and higher and quickly reset from, you know, those levels of anxiety just a few months ago. Um you mentioned some of the geopolitical turn that's happening in the market. You know, we've jumped around from Greenland to Venezuela, and of course now all eyes focused on the Middle East, but, you know, when will those narratives come back and matter again, and will investors focus more on the geopolitical side of the market rather than the tech side of the market? Again, these are all things that to us just point to continued pockets of volatility. We're enjoying an upside pocket right now, but uh I think it's important to keep portfolios resilient against those dynamics should they change.

[00:05:00]>> I wanted to ask you about that rotation away from the Mag 7, that kind of market dispersion that you mentioned. Um because, you know, some analysts feel as though there's about to be more attention on the Mag 7 once again. Were you surprised about what we've seen so far, and and what do you think we'll see for the second half of the year?

[00:05:15]>> Well, definitely the surprise over the last month might have been the strength in semiconductors and those chip makers really making up for the weakness in the Mag 7.

[00:05:23]Um you know, we've had this theme we we kind of refer to this idea as narrative whack-a-mole that we've been living in over the last year or so here with all these different narratives coming up and then you whack one down and another pops up. Um I don't think many people expected we had you know, the demand to be so strong for the AI build. There was lots of anxiety around the cost of the build, what what Mag 7 was spending on that, would they be able to earn a reasonable return on that massive spend?

[00:05:50]And of course recently we've seen some of that come through where demand seems to be exceeding supply for now, but will that anxiety that new that mole pop up again? We'll have to whack it down on the anxiety of just how much is being spent. I think that is still an unresolved question.

[00:06:08]>> And just lastly like with all this volatility and shifting narratives, how do you think investors should be kind of positioning themselves to withstand it all?

[00:06:15]>> Add convexity into your portfolio. I don't think now is the time for carry strategies or strategies that expose you know weakness either in massively rising markets or markets that are falling very quickly. So to the extent you can use certain types of securities in your portfolio, things like convertible bonds, things like options based strategies, things that naturally provide some convexity both to the upside and the downside is a good way to harvest that volatility because often times the volatility that you have to ride through might not be the return that worth the return that you're experiencing. So we're looking for other ways to harvest that volatility >> Okay, we'll leave it there. Jamie Wise CEO at Periscope Capital. Appreciate your time. Thanks so much.

[00:06:56]>> Thank you.