Squawk Pod: It’s all one trade: Steve Eisman’s AI market play- 07/27/26 | Audio Only
Speakers
Steve Eisman
— Portfolio Manager, Scion Asset Management
Helima Croft
— Head of Global Commodity Research, RBC Capital Markets
Joe Kernen
— Co-Anchor, Squawk Box
Summary
Oil tumbled ~8% after the US paused strikes on Iran, prompting Helima Croft to argue oil is a broken barometer due to China's demand cuts. Steve Eisman then warned that virtually all market sectors are now an all-AI trade, leaving no diversification. He detailed his own portfolio moves: selling Alphabet, holding cash, avoiding Clorox, while still viewing Nvidia as a long-term winner. The episode also features a new oral Alzheimer's drug showing promise in trials.
- Oil prices drop ~8% as US pauses strikes on Iran, erasing war premium.
- Helima Croft says oil fails to price Middle East risk because China slashed imports.
- Steve Eisman argues every market sector, including banks, is now an AI trade.
- Eisman sold long-time Alphabet shares to cut AI exposure amid capex and competition fears.
- He sits in cash, calling consumer staples like Clorox a waste of time in this market.
- Despite the AI complexity, Eisman sees Nvidia as a long-term infrastructure winner.
- Dr. Frank Longo discusses Phase 2 results for Compound 31, an oral Alzheimer's pill.
Ideas
Nvidia profits from AI infrastructure buildout.
Nvidia is a long-term winner in the AI buildout because it clears bottlenecks and benefits from the spending even if the financing deals become circular or the AI models themselves struggle with competition. The company is profitable on the hardware it sells regardless of how the LLM economics play out.
Sold Alphabet to cut AI exposure.
He sold Alphabet after holding it for many years because he wanted to reduce his overall exposure to the AI trade. The AI investment thesis has become more capital intensive, the moats around LLM businesses are questionable, Chinese models are much cheaper, and Google's increased capex freaked out the market.
Avoid defensive staples like Clorox.
The market is an all-AI trade with no real diversification. Defensive and consumer staple stocks do not go up in this environment and are a waste of time. He points to Clorox as an example of a name people will not rotate into.
Holding cash until AI clarity emerges.
He has raised cash by selling AI exposure and is not redeploying it because the AI debate will not be resolved soon, and there is no attractive alternative that provides upside outside of the AI trade.
