Adam Parker

Corporate earnings have been strong and likely to support a choppy but upward-trending US equity market for at least the next 6-12 months, even if price-to-earnings multiples contract somewhat.

Nvidia will reach a $10 trillion market cap by end of decade due to CUDA lock-in, 15% annual growth over 5 years, revenue at least doubling, massive cash flow, and difficulty for competitors to displace the platform.

Parker argues the equity market's negative reaction to rising yields is fleeting. He acknowledges a short-term selloff is possible, especially after big tech gains, but says history shows no statistically significant relationship between rate changes and equity changes. If yields are high because growth is good, tech stocks and the broader stock market can do well, and big company earnings and cash flows are strong enough to power through deficit and debt scares. The current backup looks like positioning and short-term profit taking rather than a longer-term signal.

Micron Technology (MU) appears undervalued, trading at 4-5x peak earnings and 10x normalized earnings after extensive simulation analysis, with significant upside to base and peak earnings over the next six months.

Energy sector offers the cleanest rotation from crowded tech; using an XLE long position with a 50/65 collar (Aug 2026 expiry) creates an asymmetric risk profile that dampens volatility while retaining upside to the 52-week high.

Power and utilities are a meaningful part of the AI revenue chain; the market is pricing in 2031 earnings potential, and traditional utilities, gas, oil, and nuclear should benefit from prolonged AI-driven power demand.

Healthcare sector is mispriced: market assigns near-zero probability of it being the top-performing sector in the next five years, but aging demographics and political unwillingness to cut spending suggest actual likelihood is 30-40%, plus it has low correlation to AI semis.

Small caps are working because investors are looking for AI alternatives, and improving industrial and consumer data supports the rotation into the space.

The trend of being short software and long semiconductors will persist because software multiples have contracted but earnings will continue to miss as customers pressure pricing and AI spending shifts; semis are justified by massive earnings growth.

The trend of being short software and long semiconductors will persist because software multiples have contracted but earnings will continue to miss as customers pressure pricing and AI spending shifts; semis are justified by massive earnings growth.