Posts

Investors Are No Longer Willing To Pay Up Blindly For The Data Center Boom

/in , /by

Cheap AI stock valuations raise doubts about data center demand

Tom Essaye argues they may be saying something less comfortable: investors are no longer willing to pay up blindly for the data center boom.

Essaye, founder of Sevens Report Research, said in a Wednesday note that cheaper AI stock valuations could reflect fear that the current wave of data center spending may slow. That matters because growth stocks typically receive richer multiples when investors believe future earnings will justify them. When some of the market’s most visible AI-linked names trade close to, or below, the S&P 500’s forward price-to-earnings ratio of 21.5, the message is not simply that shares are inexpensive. It may be that investors are questioning whether the earnings they once expected will arrive.

Essaye framed the risk through a hypothetical example. “Think of it this way: GOOGL (to use one as an example) cancels building 10 data centers because it’s going to cost too much money and the return isn’t there,” he wrote. “That will result in massive order cancellations at NVDA, MU, AVGO, SNDK, etc., because no one needs the chips, networking, memory, or processor power,” he added.

Also, click here to view the full article on Financial-world.org published on June 21st, 2026. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.

Tom Essaye Notes That The Sustainability Worries Are Still Valid

/in , /by

Practically, I don’t think this means anyone needs to reduce tech exposure today, Tom Essaye tells Barron’s.

Tech Stocks Are Cheap? That’s a Problem Too.

Essaye notes that the sustainability worries are still valid, highlighted by Oracle’s recent report.

“Using simple math, it appears that Oracle will have a close to 100% sales/capex ratio in 2027,” writes Essaye. “To keep things simple, that means Oracle will spend all of its revenue on capex, the vast majority of which will go into AI infrastructure. That means that Oracle will almost certainly have negative free cash flow and that is only sustainable for so long, even for a company like Oracle.”

Here is where the dot-com bubble comes back into play, Essaye notes, because the current AI buildout could wind up being similar to the widespread effort to build fiber access to the internet to homes across the country in the late 1990s. That demand turned out to be unsustainable, as connecting people to the internet wasn’t as profitable as initially hoped.

“Practically, I don’t think this means anyone needs to reduce tech exposure today,” Essaye concludes. “But this situation (i.e., are earnings gains sustainable?) is something that needs to be watched, so ensuring one isn’t too overweight tech and has proper balance remains important.”

Also, click here to view the full article published in Barron’s on June 17th, 2026. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.

U.S./Iran Conflict And AI Continue To Dominate The Market Narrative

/in , /by

Nasdaq-100 Falls As Investors Rotate From AI To Old Economy

“The U.S./Iran conflict and AI continue to dominate the market narrative, but tomorrow’s jobs report is still very important for markets because the strong labor market is a critical offset for the consumer amidst high inflation,” said Tom Essaye of the Sevens Report. “A ‘too tight’ labor market would risk increasing the chances of Fed rate hikes sooner than expected.”

Also, click here to view the full article published in Financial Advisor Magazine on June 4th, 2026. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.

Jobs Day

/in , /by

What’s in Today’s Report:

  • Jobs Day
  • Is AI Friend or Foe to the Labor Market?

Futures are modestly lower mostly on continued tech weakness following AVGO’s disappointing earnings and after a mostly quiet night of news.

Tech stocks are extending Thursday’s post AVGO earnings driven declines and that’s weighing on futures although nothing newly negative occurred overnight.

Economically, the only notable report was Q1 Eurozone GDP which missed estimates (0.3% vs. (E) 0.8%).

Today focus will be on the jobs report and expectations are as follows: 85K Job-Adds, 4.3% Unemployment Rate and 3.4% y/y Wage Growth.  The “best case” scenario is a Goldilocks number with above expectations job adds and unemployment and wages that meet or slightly beat expectations, as that will imply a stable labor market but not one that is putting upside pressure on inflation.

 

Sevens Report: IGV Weakness Raises Tech Market Concerns

/in , /by

Tom Essaye warns lack of rebound in software ETF is a caution signal

IGV: If this Software ETF Can’t Rally, be Wary of Trading Tech Stocks

Fears that AI could have broader economic consequences weighed on software stocks in Q1, and that pressure remains evident in the iShares Expanded Tech-Software Sector ETF (IGV). The fund has not staged a meaningful rebound and continues to trade only modestly above its 2026 low, observes Tom Essaye, president of the Sevens Report Research.

Geopolitical tensions, including the Iran conflict, recently drove defensive flows into mega-cap tech. While that rotation supported broader indices, IGV did not participate and remains below recent highs.

Fundamentals have not materially deteriorated. AI concerns have not intensified, and recent software earnings were generally stable. However, the absence of upside momentum is notable.

A break below the February low would be a negative technical signal for tech and could weigh on the broader market. Even with potential geopolitical easing, AI uncertainty and private credit risks remain unresolved headwinds.

Also, click here to view the full article on Moneyshow.com published on March 27th, 2026. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.

How AI Turned Into a Market Headwind

/in , /by

What’s in Today’s Report:

  • How AI Turned Into a Market Headwind
  • Updated Market Outlook: Three “AI Problems” to Monitor
  • Weekly Economic Cheat Sheet – The First February Data Is In Focus

Stock futures are lower with tech leading amid ongoing AI-narrative worries while bond yields are bleeding lower on global growth concerns.

Economically, U.K. Unemployment rose to a 5-year high of 5.2% vs. (E) 5.1% while German CPI held steady at 2.1%.

Looking ahead to today’s session, economic data will be in focus early with the Empire State Manufacturing Index (E: 10.0) and latest Housing Market Index (E: 38) both due to be released.

Moving into the afternoon, there are a pair of Fed officials scheduled to speak: Barr (12:45 p.m. ET) and Daly (2:30 p.m. ET) as well as a 52-Week Treasury Bill auction at 1:00 p.m. ET. The auction results could offer fresh insight on the market’s outlook for Fed policy between now and yearend and subsequently could move markets (stocks and bonds) this afternoon.

Finally, earnings season continues this week with Q4 results due from ET ($0.34), MDT ($1.33), LDOS ($2.57), and PANW ($0.49).

 

Tom Essaye Quoted In Barron’s – A Problem For The Nasdaq and S&P 500

/in , /by

If AI blows up large market sectors, that won’t be good for the S&P 500

Review & Preview: Utilities Are the New Bitcoin

“If AI begins to make entire, large sectors of tech no longer needed, that is a problem for the Nasdaq and the S&P 500 and that loss of earnings could offset AI efficiency gains in the short and medium term,” wrote Tom Essaye, president of the Sevens Report. “If AI blows up large market sectors, that won’t be good for the S&P 500.”

Also, click here to view the full article published in Barron’s on February 5th, 2026. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.

Tom Essaye Interviewed on Yahoo Finance To Discuss The AI Trade

/in , /by

Yahoo Finance Interview

Why the AI trade could change in 2026

Artificial intelligence will continue to be a key pillar of market gains in 2026. We speak with Sevens Report research founder Tom Essaye, Epistrophy Capital Research Chief Market Strategist Cory Johnson, and TECHnalysis Research, LLC President Bob O’Donnell about the AI trade and what to expect in 2026.

Also, click here to view the full video preview published on YouTube.com on December 29th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.

Can the Market Rally Without AI and a Dovish Fed?

/in , /by

What’s in Today’s Report:

  • Can the Market Rally Without AI and a Dovish Fed?
  • Weekly  Market Preview: Santa Rally On?
  • Weekly Economic Cheat Sheet: More Insight on Growth

Futures are marginally higher mostly on momentum from Friday’s rally and following a quiet weekend of news, as AI linked tech stocks continued to rebound.

Both gold and silver hit new all-time highs on rising geopolitical tensions as U.S. forces boarded another oil tanker bound for Venezuela, further increasing tensions.

Economically, the only notable report overnight was United Kingdom Q3 GDP, which met expectations rising 0.1% q/q and 1.3% y/y.

Market and economic calendars are mostly quiet this week and that includes today as there are no notable economic reports or Fed speakers.  That said, geo-politics remains a potential market mover this week, if we see a further increase in tensions between the U.S. and Venezuela.

 

Why Gemini Could Weigh on AI Enthusiasm

/in , /by

What’s in Today’s Report:

  • Why Google’s Gemini Update Could Further Pressure AI Enthusiasm

Futures are higher on strong earnings and guidance from MRVL after the close yesterday (shares +10% premarket this morning) ahead of the release of a slew of key economic data today.

Overnight, global Composite PMI data was solid as Chinese, U.K., and Eurozone releases all topped estimates with headlines in expansion territory.

Today, there is a long list of data due out in the U.S. including the ADP Employment Report (E: 20K), Import & Export Prices (E: -0.2% m/m, 0.0% m/m), Industrial Production (E: 0.1%), and the ISM Services PMI (E: 52.1).

There are no Fed officials scheduled to speak today however there is a mid-duration Treasury Bill auction (for 4-Month securities) that could shed light on current Fed policy expectations; the more dovish the outcome/stronger the demand for the Bills, the better.

Finally, Q3 earnings continue today with results due from DLTR ($1.09), M ($-0.13), RY ($2.52), CRM ($2.15), SNOW ($-0.58), and AI ($-0.75), and investors will be looking for more strong results, particularly from the tech companies reporting today.