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I Don’t Think Any of This is a Major Indictment of AI, Tom Essaye tells Barron’s.

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I don’t think any of this is a major indictment of AI, Tom Essaye tells Barron’s.

Mag 7 Stocks Shed Nearly $3 Trillion This Month

Sevens Report Research’s Tom Essaye told Barron’s that the so-called hyperscalers are drawing some scrutiny from Wall Street lately for their big spending efforts.

“I don’t think any of this is a major indictment of AI, but if we think about all this stuff needing an ROI, if everything costs way more, then the ROI needs to be bigger—or big enough—to absorb these insane cost increases that people have to deal with on the memory and chip side of things,” Essaye says.

Also, click here to view the full article published in Barron’s on June 25th, 2026. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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Understanding Where Earnings and Revenue Growth Is Coming From

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What’s in Today’s Report:

  • Understanding Where Earnings and Revenue Growth Is Coming From
  • Visual – Money Is Moving From the Hyperscalers
  • JOLTS Data Takeaways

Futures are mildly lower as geopolitical tensions flared in the Middle East overnight with the U.S. and Iran launching a fresh wave of military strikes against one another which sent crude oil prices and global bond yields higher.

Economically, China’s May Service PMI was solid (54.4 vs. E: 52.2) while the EU Composite PMI was better than feared (48.5 vs. E: 47.5) but still in contraction territory. Paired with the latest EU PPI release, which showed a headline increase of 4.9% vs. (E) 4.5% Y/Y, the data rekindled stagflation fears in the Eurozone.

Looking ahead to today’s session, focus appears to be shifting back to the geopolitical situation in the Middle East, so any material developments (good or bad) will likely impact markets with traders keenly watching oil prices as a bellwether.

On the data front, “jobs week” kicks off with today’s ADP Employment Report (E: 120K) due out ahead of the bell, while data on Factory Orders (E: 4.3%) and the ISM Services Index (E: 53.9) will both be released shortly after the opening bell. The stronger the growth data/cooler the inflation data, the better for stocks.

Additionally there are two Fed officials scheduled to speak today: Barr (9:00 a.m. ET) and Logan (4:00 p.m. ET) and investors will be looking for a less-hawkish tone regarding potential rate hikes in 2026 in order for the risk-on rally to continue.

Finally, on the earnings front, quarterly results from MDT ($1.54), M ($0.02), AVGO ($2.02), CRWD ($0.13), AI ($-0.74), and FIVE ($1.70) are all due to be released. The semiconductor/AI-names will be particularly important as tech earnings/revenue growth has been a major market tailwind in Q2.