The risk for investors right now is being underinvested, says KKM Financial’s Jeff Kilburg
Speakers
Jeff Kilburg
— Founder and CEO of KKM Financial, CNBC Contributor
Summary
Jeff Kilburg of KKM Financial discusses a cautiously optimistic equity setup, arguing that strong earnings and low volatility support continued market gains and that being underinvested is the bigger risk. He highlights NVIDIA's green light for AI infrastructure, the Salesforce-Anthropic deal as a positive for software, and a broadening rotation into materials. He also discusses Fed Chair Warsh's Jackson Hole appearance and options market signals.
- Kilburg is cautiously optimistic on equities and says the main risk is being underinvested.
- Low VIX near 14.5 is viewed as a short-term all-clear, not complacency.
- Historic 30% year-over-year EPS growth is offsetting higher 10-year yields and geopolitical risks.
- NVIDIA earnings are seen as a green light for AI networking and AI infrastructure.
- Salesforce-Anthropic partnership is framed as relieving software 'SaaS pocalypse' concerns.
- Materials such as XLB, Nutrien, and Newmont are participating in a healthy rotation.
- Fed Chair Warsh is expected to keep his message minimal, leaving markets wait-and-see.
Ideas
Risk is being underinvested in equities.
He is cautiously optimistic on equities: the low VIX around 14.5 signals a short-term all-clear rather than complacency, and a historically strong 30% year-over-year EPS growth earnings season is the undercurrent offsetting higher 10-year yields, the Iranian conflict and tariffs. The market is likely to continue moving higher, and the main risk for investors is being underinvested.
Software/SaaS revival on Salesforce-Anthropic deal.
The Salesforce-Anthropic partnership relieved the 'SaaS pocalypse' concern; software is popping and AI is emboldening and fortifying software names. The wide dispersion between software and semiconductors has narrowed, and he points to IGV as a way to play the software catch-up.
Salesforce-Anthropic partnership revives Salesforce.
The Salesforce-Anthropic partnership is a concrete positive catalyst showing that software names are not done, and AI can embolden, fortify and galvanize names like Salesforce.
Materials rotation lifts XLB, Nutrien, Newmont.
Lagging sectors are finally participating, with materials rotating higher. XLB is coming back, and names like Nutrien and Newmont are seeing investor love because of the 2026 rotation theme. He sees this broadening rotation as healthy.
NVIDIA green light; AI infrastructure back on.
NVIDIA's earnings gave a green light that anything AI related, including AI networking and AI infrastructure, is back on. AI remains the hinge for the market, and AI capex is real and tangible, supported by Amazon's ability to match capex spending with returns.
