AI spending and the economy: three pillars holding it up

0:00Right now there is $650 billion, that's a billion with a B, being pumped into artificial intelligence by just four companies. And where that money lands and where it doesn't could be the single biggest determining factor whether your portfolio is going to go up or down this year and in the coming years. And meanwhile, Wall Street's biggest bank just released a secret list of stocks they believe are completely mispriced and insulated from AI disruption. And today, I'm going to tell you what's on that list.

0:36Why? Because they send that list not to retail investors, not even to CNBC or anybody else. No, they send it only to their large institutional customers. And I think we deserve to see the list, don't you? Do you think we deserve to see the list? If you do, put list down below. And I'll give you the link in just a second. It's down in the description as well.

1:02Because whether you own tech stocks or bank stocks, you just have an index fund sitting in your 401k and hoping for the best, the rules of Wall Street have just changed. And most retail investors have no idea. And as I read this just now, I'm here to see you on holiday somewhere glorious. You can guess where, you get a golden cookie. And I thought I think people deserve to understand this. So let's get to it in this video as quickly as humanly possible.

1:31And my promise to you is that by the end of the video, you'll understand the 3 forces keeping the economy from crashing. Why that might not actually be good news for the average American and how to position your portfolio based on what JP Morgan is actually doing with JP Morgan money, not what they're telling CNBC, right? The real stuff.

1:53Now, if you don't know who the heck I am, my name is Felix P. I'm an ex investment banker. I've seen how the inside really works. I'm usually supported by a very smart golden retriever. They didn't come on this trip. This country has quarantine rules. But I'm also the founder of the GOAT Academy where my retired Wall Street mentors teach regular investors institutional strategies. These are guys who worked at Goldman Sachs, at JP Morgan, at Bear Stearns. Guys who've worked in these institutions for decades and we've taught well over 20,000 students over the last 6 years and it's tremendous fun.

2:33I'm also the co-founder of TradeVision.io where a lot of my data and news always comes from and I'm dedicating my retirement, travelling retirement, to give regular investors access to the knowledge that is really usually only taught to Wall Street bankers by their boss. So this is not what's in press releases. This is the analysis that happens usually weeks and months before it goes onto mainstream television.

2:59And if you've been paying attention to financial news lately, and you shouldn't, by the way, it's usually just nonsense, but the government is a little unpredictable. Tariffs are flying around like confetti. The average American household is paying an extra $1,300 per year because of those tariffs. I know you're getting huge tax refunds, which is tremendous. I hope this will work out. That's not a political statement, by the way. I can see the arguments for and against tariffs. I can see the sense of bringing manufacturing home. There's a lot of logic in that.

3:33But consumer sentiment is, to use a technical term, and I need to explain that, it's in the toilet. So yet the S&P 500 is basically flat. It's going absolutely nowhere. Banks are talking about strong loan pipelines and the Treasury Secretary, good old Scott, is out there calling for a blockbuster 2026.

3:56So the economy is doing well, either great, it's about to collapse, or we're all living in some elaborate financial Truman show where the script doesn't quite make sense. And it's a little bit the last one. The reason why this is actually happening is potentially very profitable and if you know where to look, which you will if you keep watching, you'll be in a much better position.

4:22So here's my framework and I will try to put some stuff on the chart here for you. The guys will knock something up that makes it a little bit more comprehensible for all of us. But my framework for understanding what's really happening is the following. I call it the 3 pillars. Once you see it, you can't unsee it. These are literally the 3 forces that are propping up the economy. They're the scaffolding on a building that maybe should have already been taken down. So let's break them down one by one.

4:54I give you pillar number 1. I'll give you all the CTAs as well. The list and everything else is down below in the description if you're just one of those hit and run type guys, but you won't know what the heck you're looking at because you're just looking at a list. So stick around.

5:06Pillar number 1, AI spending is the single largest driver of private demand in the American economy. We're not talking about ChatGPT helping you write emails anymore. We're talking about Microsoft, Amazon, Alphabet, Meta spending $600 billion plus this very year on AI infrastructure. So to put that in perspective, that's more than the entire GDP of Sweden. I don't really know what the Swedes make. What do the Swedes make? They make great cracker bread. We know that much. Any Swedes watching? Put it in the chat. What do you guys make? It's a lovely country, amazing people, but I have no idea what they make, but apparently it's bigger than them.

5:46Goldman Sachs, the lovely bankers, the ones who really care. They're really big into supporting the local bunny rabbit rescue charity, that sort of thing. They say that this matches the 90s telecom investment boom. So been there before, right? That's when I started investing.

6:08Now, when these big 4 companies say they're spending money on this, they're saying we're investing in the future. They say it's a generational opportunity, which basically means we have no idea if this will pay off, but if we don't spend money on it and our competitors do, we'd be toast. That's why there is probably a little bit of overspending going on.

6:29And AI related sectors, the companies, are about 40% of GDP growth last year. Tech is 75% of all the S&P 500 profits. So why has the economy not crashed yet? Well, this is a big part of that. Those guys are just spending money. They have a lot of cash flow. They're spending it, but they're also borrowing a lot and they're spending it. It's a tsunami of corporate money being dumped into the good old American economy.

7:00But it creates a risk. It creates concentration fragility. That's a fancy term, isn't it? Say you're a semiconductor company selling chips to these big 4 companies. Business is amazing, right? If you're a software company that might get disrupted by AI, well, JP Morgan's data shows that the long semiconductor short software trade has made 35% so far this year. What does that mean? They bought semiconductor stocks and they sold short software companies. Not recommending this, but they've made 35% on that. The guys do know how to run a market.

7:34But both sectors are at historical extremes. Tech stocks are really, really expensive and software stocks are really, really, really cheap. Historic extremes and there is always an opportunity in an historic extreme. So pillar 1 is holding up the economy but it's also creating massive winners and massive losers within the market. And a bit more detail on that in just a second.

7:56Now the second pillar, and this one is, and actually maybe I should mention this first. You're wondering well how do I find the winners, right? Anybody thinking, put a W in the comments down below. Well, Wall Street has rules for that. The same rules were not made up last week or last month or last year. They've been around for 50 years and nobody knows them except the people who've actually worked on Wall Street usually.

8:17So what am I going to do? I'm going to teach them to you in this video. No, it would make this insanely long and I am on holiday. But on Saturday we're going to run a live session, be time for you lots on the east coast and it'll be afternoon for the Brits and those of you in the Soviet republics of Europe. So go to felixfriends.org/training I think it is or webinar. There's a link down below in the description. You click on that, grab yourself a free seat. We have not run one for a European daytime audience in about 6 months and I might not do it again. So grab that chance and please be on time because the last time the room's full and people were like I can't get in. Well, you got to be on time, right? That's a big lesson in life.

9:02Now pillar number 2. The top 10% of American households drive half of all consumer spending in the United States, which of course is a record. Not a great record, but it's a record of sorts. So why does that matter? I'm not a socialist. Obviously, I'm a former banker. Do you think I was a socialist?

9:24But look, consumer spending is the lifeblood of the US economy. It's more than two thirds of your entire economy is just the consumer swiping plastic, right? So why is the government so bullish on a blockbuster 2026? Well, for those people whose portfolio's up, whose home values have climbed, who got big tax cuts and yes, huge tax refunds, well, they have a lot of money. And that's the top 10%. And guess what? They're probably going to spend more money. So it could actually be really, really good for the stock market and we see in the data the spending goes up.

10:01About 10% a year. Now the spending by the lower and middle income households actually declines. So it's just capitalism, right? It's not fair. It's not nice. But you can decide whether you want to be part of the winners or whether you want to be part of the complaining non-winners. There's a suggestion there for you. So there's no politics, but I'm just saying this is how it works.

10:25If you have capital, you make a lot more money. If they pump the market and it goes up, if you don't have any capital, well then you get proportionately poorer. And it's very unfair. I get it. You can go demonstrate, but it's not going to change anything because politicians don't really care and JP Morgan isn't going to listen and Wall Street's going to do whatever it does to make the most money.

10:49So we have this weird number though because the total economic number looks really brilliant. There's this wealth effect. The stock market goes up, home prices go up, rich people feel richer so they spend more and that shows up in GDP growth. But a lot of people are getting more vulnerable and they're getting their incomes inflated away so they're spending less, stuff gets more expensive. It's incredibly unfair.

11:20Now, I don't believe we can change the system, you and I. I'm not a system changer, but I believe if we learn the tools of the guys who are making all the money, we can make potentially a lot more money. So join me Saturday, felix.org/training, links down below.

11:37Now, the third pillar, and I promise to give you that list. Look, pillar 3 is probably a little bit controversial. So let me explain. There's a theory floating around Wall Street discussed in places like Bloomberg and the Wall Street Journal, which is Bezos's little tabloid paper, that the current administration has a back-off button when it comes to economic policy. And the argument goes like this. Political success is tied to economic success. The market tanks, approval ratings tank, and therefore there's a built-in pressure release valve.

12:17And we saw that play out in 2025. Remember when the tariffs went up, the market freaked out, and there was a 90-day pause announced, and the S&P posted the biggest daily gains since 2008. Investors took this as confirmation that there is a floor, that if things get bad enough, policy will adjust. Now, I don't know if that's a healthy way to run the economy, but it's just politics. You can see the sense in it. If you're in politics, you want to stay in power. There are midterms coming up. They're going to want to win them, right?

12:49So it creates a weird bubble where everybody assumes someone will step in until one day, well, guess what? What if they don't? What if they step in too late? But for now, this belief is functioning as a psychological support for the market. And that's very important because it creates opportunity.

13:08And opportunity is, I believe, in a JP Morgan list. I'm going to give it to you. But if you just have a list of stocks, well, you're betting because do you know the actual rules that Wall Street uses to pick those stocks? Not the stuff they tell retail investors, but the frameworks they teach in the big banks. So that's what we're going to cover in our free training on Saturday. We're going to break down the rules, the same ones that I've learned from my mentors who've done this for decades on Wall Street. So if you want some institutional insight, not guessing, not just a cheat sheet of list of stocks, go to felix/training, link is in the description.

13:48Now, the link to the actual list is also down in the description. So you might want to take advantage of both of them. So you now understand the 3 pillars. You understand more about the economy than 98% of economists. I'm one of those. We're a bunch of lunatics really. We're mostly wrong and quite happy about it because they're usually quite overpaid in banks.

14:11But the real question is how do the smart money guys trade this? Because what I learned from my mentors, guys who worked in these banks for decades, is that what the banks say publicly and what the trading desks actually do are often different. Now, this list comes from their trading desk. It's not my list. It's not promise or profits. I'm not telling you to buy it. Just sharing some information with you because this market intel note from JPM is internal stuff, right? Shh, don't tell them.

14:42What's their key message? There's a quote. If I can remember correctly, it's something like, "We're getting closer to the end of the AI obsolescence narrative suggesting a dip buying opportunity within the mega cap tech sector." They want to sound smart. They're basically saying it's almost time to buy the freaking dip. Right? So the panic selling in AI stocks is almost over. Maybe it's time to start buying.

15:06But not everything. Not everything equally. Because what's actually been happening is that investors started to panic about AI disrupting, well, guess what? Everything. Software companies might be obsolete. Banks might not need as many employees. Freight and logistics companies could be automated. There'll just be a little robot running it all. And that created a fear. Well, it's a sell. We'll figure out what it was all about later. And it pushed a lot of stocks down. And JP Morgan thinks those prices are mispriced.

15:35Now, what does mispriced mean? Mispriced in my book means cheap. Now, I never buy a stock because I think it's cheap. I only buy a stock if money is flowing into it. Wall Street money is flowing into it. I'll teach you how to spot that on Saturday.

15:50So let's talk about this obsolescence fear. That's obviously a JP Morgan word, but who says obsolescence? Anyway, things becoming irrelevant. So if you've been doing this for a little while, you'll know by now that Wall Street discovers a new existential threat to freak out about. In 2020 it was everything will be remote forever. No one's going to go back to the office, right? In 2022 it was interest rates will destroy the economy and they'll stay high forever. And now it's AI will replace everything.

16:19And look, AI will disrupt a lot of businesses. It's for sure, it's real. But what JP Morgan bods are saying, and again I'll vaguely remember the quote here, says, "We do not think that AI will eliminate all software companies," which is amazing, isn't it? It's groundbreaking stuff. Good job. These guys get paid 7 figures to come up with this drivel. Real revolutionary stuff. Not all software companies will die. I'm glad they get paid more in a bonus than most of you probably make in a year or in 10, right? Life's fair, right?

16:55But the useful part is that they actually identified that the market might have gotten ahead of itself in pricing in AI disruption. So the positioning data shows software companies basically beaten to within an inch of their life. And statistically when we're in that level where they're just lying on the floor bleeding and just panting gently, we're oversold. And then they also put in some data there on actual AI adoption in businesses. Companies with paid AI subscriptions grew to about half of all the companies, but that's about a 90% growth from a year earlier and they all expect to increase AI spending.

17:36So AI is real, right? The everything doom narrative, that might be a little bit, just a little bit, teeny tiny bit overdone. So the part you've been waiting for, the basket of stocks that JP Morgan has created which they believe are most mispriced and insulated from AI disruption. That's not mine. So these are companies that their trading desk is buying or recommending that their customers buy, which is important because it's not just a piece of paper, it's what they actually may be doing.

18:05So let me walk you through the sectors and highlight a couple of the names. I'm going to give you every single name, but I say you can look them up in our free community. And if you can't find it, a lot of people will write in the comments, "I can't find it, Felix." Well, did you go into the free community and did you click on YouTube or video workbooks? There's a channel in there called video workbooks. It'll be in there. You can find it there. You can ask me a question about it, but you'll find it in there.

18:32So who do they like in tech? They like cyber security. CrowdStrike, Palo Alto, Okta, Zscaler, and SentinelOne. The logic is pretty straightforward. AI creates a lot more data. It creates a lot more attack surfaces. It makes attacking easier. So you need more defence, right? Because AI has just got more ammunition. So the hackers become more powerful. So you need bigger walls.

18:54They also like Datadog, ServiceNow, HubSpot, companies that help other businesses manage their tech. So these are kind of pick and shovel type businesses. And then interestingly they also have Microsoft on the list. Even though Microsoft is one of those hyperscalers spending all that money, JP Morgan sees them as insulated because they're selling AI tools to everybody. Right? Think cloud computing, think OpenAI, think Copilot.

19:20And then in the really sexy sector, I'm quoting JP Morgan, not my words. It's in there, I promise. They say in financials they like the Bank of New York Mellon, they like NASDAQ, NASDAQ Inc. not the index, Moody's and S&P Global. Those two companies were the ones who fingered the 2008 collapse. And MSCI. So these are financial infrastructure companies because we need data, we need indices, we need credit ratings no matter who cooks them up. And AI doesn't actually get rid of these. AI needs more data. There are also some real estate plays in there that they like. BXP, which is formerly the

19:58Boston Properties, CBRE and Jones Lang LaSalle. Why? I actually had a chat with a good friend of mine yesterday who's in commercial property management and we were talking about how marvellous AI is to automate a lot of the stuff that they're currently doing manually and it'll make things a lot cheaper to run. So I can kind of get that there.

20:18Any consumer names you might recognise? Yeah, Celsius, knock that stuff back, it'll kill you. Carvana, Elf Beauty and Wayfair. Then we have some industrials, CACI, Leidos, Trimble, essentially defence and government contractors basically.

20:34And then there is an interesting one which is the contrarian one and I always like a contrarian one. This was called CH Robinson Worldwide. I know it's the stock you discussed with your family over cornflakes this morning. Say, Dad, have you seen the stock chart of CH Robinson Worldwide? I know, what the heck is this.

20:51It's a freight brokerage company. It got absolutely hammered. It's down 25% in a single day recently because of fears AI could automate freight matching basically. But JP Morgan is betting that's overdone. They have an overweight rating on them. This is the Wall Street, well it's bleeding, let's buy it, even if it's a bleeding AI robot.

21:16But look, I'm going to be very clear. I'm not telling you to run out and buy these stocks. This is JP Morgan's view. This isn't financial advice. I'm not a registered financial adviser or anything like that. I just think we deserve to understand what's going on out there, not just for this dip, but any other future dip.

21:32So I think hopefully what I'm teaching you here is going to be relevant for a long period of time. But the takeaway, I think, is that Wall Street isn't panicking. They're looking for the overreactions and they're positioning for the reversal. So get yourself that full list, the mispriced list. Every single one of them, the full list, the PDF is in our community. It's a free community, and then you click into that video workbook channel and you'll find it right in there.

21:57And make sure you join me for the live training on Saturday and I'll teach you the actual 3 steps of how to pick those stocks with confidence, how to follow the money because I think that's the single biggest lowest hanging fruit we have as investors is to actually have a system, a structure, an automation.

22:18And look, I'm fairly bullish on the US economy for the year. You're going to get a new Fed chair. He's going to lower interest rates. Biggest tax refunds ever. $600 billion plus spent by just 4 companies on AI infrastructure in the US. It's kind of hard to see how we screw this up. Doesn't mean we won't. Wall Street's got a knack for that sort of thing. But I think there is a very large upside narrative here.

22:41Now, do I follow the narrative? No. Do I follow my belief system? No. Do I follow my conviction? Absolutely freaking not. What I follow is the money and the money tells the whole story and I'll teach you how to follow the money. Join me Saturday, felix.org/training, and I wish you a beautiful, beautiful year. Great success and enjoy yourself.

23:02Goldman Sachs, JP Morgan, basically every investment bank and every central bank on the planet is scrambling to get their hands on as much gold as possible.