Part 7/13:
Despite some market skepticism, Ives observes that markets are resilient, with numerous record highs and shallow pullbacks. It appears that institutional investors—traditionally cautious—are now compelled to catch up in their AI exposure after selling off earlier this year. Conversely, retail investors, who are more actively buying, add to the upward momentum.
He attributes this to a "catch-up trade", where both sides are driven by the necessity of maintaining competitive performance. As institutional investors chase performance, trillions of dollars flow into tech stocks, reinforcing a market environment that is less reliant on short-term fundamentals and more on the ongoing AI-driven capital infusion.