Posts

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.

Tom Essaye Quoted in Yahoo Finance: “If AI goes south on us, tech will go.”

/in , /by

Tom Essaye tells Yahoo Finance, “If AI goes south on us, tech will go.”

AI took investors on a date in 2025. In 2026, analysts say it’s time to foot the bill.

“If AI goes south on us, tech will go,” Tom Essaye, founder and president of Sevens Report, told Yahoo Finance in an interview.

In a new report, “Taking Stock of the Four Pillars of the Rally Ahead of 2026,” Essaye observed that the initial unified enthusiasm for AI has become “fractured.” The industry is moving into a period where the market is aggressively sorting winners and losers. While memory plays like Micron (MU) have surged over 241% year to date, Essaye argued that former darlings like Oracle (ORCL) have faced more scrutiny as investors demand immediate ROI.

Also, click here to view the full article on Yahoo Finance published on January 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.

AI Stocks Lead Market Selloff, but Sevens Report Says “Nothing’s Gone Wrong”

/in , /by

AI Stocks Lead Market Selloff, but Sevens Report Says “Nothing’s Gone Wrong”

Is the entire AI-driven rally suddenly at stake?

The Nasdaq suffered its worst week since April, falling 3% as mega-cap tech and AI-linked names led the decline. But according to Sevens Report Research, “nothing new” has gone wrong with the AI story.

The firm said the pullback reflects investors confronting “the tectonic gap between the amount of money being spent to build out AI capacity…and the paltry amount of revenue that AI is generating.”

That concern was highlighted when Apple reportedly agreed to pay Google only $1 billion to use its Gemini model in an AI-powered Siri — far less than AI bulls had hoped. “It reinforces the view that AI [is] not really being ‘worth’ that much to the end user,” Sevens noted.

Other developments, including Oracle’s heavy AI infrastructure spending and Meta’s post-earnings drop, fueled additional worries.

Still, Sevens emphasized that “nothing has occurred that makes us think the entire AI-driven rally is suddenly at stake.” The firm called the recent weakness a “sobering moment” rather than the start of a collapse, adding that without AI enthusiasm and capital spending, both the market rally and U.S. economic growth “would be much, much smaller.”

Also, click here to view the full article published in Investing.com on November 10th, 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.