AI revolution could TRANSFORM markets, analysts say

Added: 2026-05-22

[00:00:03]Time now for the word on Wall Street.

[00:00:04]Top investors watching your money.

[00:00:06]Joining me now Key Advisors Wealth Management CEO Eddie Gabor. Also with me here on set is John Lonski. And Eddie, we're going to start with you and take a look at futures ahead of the holiday weekend because things are looking pretty good. Tech stocks right now as you can see are doing really well and this is powering the Nasdaq as you see on your screen up 17 points. S&P is up by eight. Dow up by 120 in the pre-market. Of course, we had a record on the Dow last night joining the party of the S&P and the Nasdaq which have both been hitting multiple records over the last couple of weeks. Nvidia's blockbuster earnings beat of course has been the talk of the week and we've got all these major tech IPOs that are coming. SpaceX officially filing paperwork to go public. Open AI could reportedly file within days or weeks and Anthropic is going to be later this year. Supposedly, the company does say a portion of shares are going to be sold to regular retail investors through trading platforms like Fidelity, Robinhood and Charles Schwab. Eddie, I want to get your thoughts on all of this.

[00:01:04]Look, I think this is one of the most resilient and strongest markets we've seen in our lifetime. For us to continue to hit new highs the way we have in the face of an energy crisis and yields really spiking, I think speaks to how strong the economy is and how strong earnings growth has been. Markets care more about the rate of change versus the actual numbers and the rates of change on earnings and revenue growth for businesses have been amazing. And this AI spend and they're projecting 600 to 700 billion of CapEx spending this year.

[00:01:34]This is a massive boost to the economy and I think right now that only the biggest challenge we have here short-term is energy prices. A peace deal would certainly help tremendously if it bring oil prices down and then the 10-year treasury would come down as well, too. So, if oil prices stay elevated and the yields continue to make higher highs, you should expect a summer correction, but I would be buying those hand over fist because the biggest thing I've seen here is people have missed this rally. It's been really hated. They continue to ask how much higher can it go? Uh and this is a real earning story.

[00:02:08]These aren't just companies that are fly-by-night. So, we've been concentrated in technology. We've rotated in and out of areas that are interest rate sensitive. And if we get a gift of another summer dip like we saw a few days ago and like we saw earlier in the year, we will buy hand over fist cuz I think by the time we get to the end of the year, markets are going to be much higher and we're going to surprise to the upside on growth economically as well as earnings projections.

[00:02:32]>> You know, Eddie, uh Marie interviewed Jensen Huang, president CEO of Nvidia uh on this program. Here is what he told her about AI and profitability. Listen.

[00:02:45]The first thing is to take a step back and realize that AI has only recently started to do productive work. It's able to now do something productive for us, do something valuable. We're at the beginning of the scale out of AI, finally. We're kind of in, you know, if you will, the second inning. The first inning was just getting AI the technology to be invented. So, we're in the second inning of that. It's very clear that through next year, through the next several years, the world is going to have more demand, far more demand than there will be supply. And so, we it's going to be it's going to be a couple of 2-3 years of catch-up. And then beyond that, we're going to scale AI from the cloud to enterprises, to industrial. And that's physical AI or robotics is really where I think that the largest industries will be impacted and really be benefited by AI. And so, that's still several years away.

[00:03:41]Eddie, your reaction to those comments from him?

[00:03:45]I couldn't agree more and that's what's so exciting right now. And I think who it's going to benefit tremendously are small businesses.

[00:03:51]Uh this has been the talk in all board rooms, especially the last few months. I am seeing this business owner after business owners talking about how they're going to be implementing AI to make their companies more efficient, more profitable. Uh and so, we are in the very early innings of this. I've just spent uh the last couple of days with my buddy Bob who has about 30 business owners uh together for a charity golf tournament. And And we have these conversations they're over uh lunch. This is what everyone is talking about right now. And it's just started.

[00:04:21]So, I think you have one of two companies. You're going to have companies that adopt AI and are going to be forward-thinking, or you're going to have those that don't and they're going to be obsolete in the next 3 to 5 years.

[00:04:31]Uh so, even in the financial service business, you have to have that as part of your investment process if you want to stay ahead of the game, be competitive, and be one of the best at what you do.

[00:04:40]>> Maybe interest rates can be a part of that future story. Uh Jerome Powell today at 11:00 a.m. Eastern time Kevin Warsh will be sworn in as new Fed chair by President Trump. This is happening at the White House.

[00:04:52]Uh let's take a look at yields this morning. Bond market does close an hour early today at 2:00 Eastern time for the weekend, but the April April Fed minutes did show that they're becoming more open to a possible rate hike as policy makers say that high energy prices and the president's tariffs plan are putting pressure on overall inflation. John, your thoughts on all of this? Well, it's not only oil and tariffs putting upward pressure on inflation, it's actually still pretty strong rate of economic growth. You know, I'm really blown away by the fact that uh according to facts that S&P 500 revenues, that is the revenues of the member companies of the S&P 500 are up by more than 11% year-over-year in the first quarter.

[00:05:37]They see 11% growth again in the second quarter and growth remaining above 9% in the second half. My goodness, with that type of revenue growth, you can't help but think that there is going to be higher than expected prices. This upward pressure on inflation will persist up until we have a slowdown by consumer spending. And of course, yesterday we got some news from Walmart that spoke of this type of a possible slowdown by consumer spending, which is necessary if we're finally going to rein in price inflation.

[00:06:17]>> those Walmart earnings, real quick, Eddie, those Walmart earnings were maybe not what many on the street wanted to see from the economic consumer side because as goes Walmart, as goes the US economy, to be clear.

[00:06:31]Yeah, and that's why we were saying in this summer you should you could expect a correction again in the markets because at some point in time the market's not going to look through high energy prices and it will be a tail or headwind to the economy. So, there's a difference between slowing and going into a recession. We're not concerned about a recession at all, but I think one should expect a little bit of a slowdown on growth, but again, I think that's going to be very temporary and by the time we get to the fourth quarter, I think we reaccelerate. So, I would use any slowdown and so-called economic scares as opportunity to reposition the way that you should be from a portfolio perspective.

[00:07:07]>> Yeah, now Halo stocks is what Chris McMahon was talking about yesterday.

[00:07:11]Plays that are not AI that thank you Eddie. Gabor, it's great to see you this morning. Appreciate your time ahead of the holiday weekend. John, you're [music] going to stay with us all morning long. We've got a lot more coming up. Senate Republicans canceling a vote on the budget reconciliation bill over [music] major disagreements on the nearly $2 billion weaponization fund.

[00:07:30]This means that bill will not hit the president's desk [music] by June 1st.

[00:07:34]That was his deadline. We've got Tennessee Congressman Andy Ogles. He's got the latest for us. That's next.

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