Podcast

The current hype surrounding artificial intelligence (AI) is driving the stock prices of tech giants to dizzying heights. But is this boom sustainable, or does it conceal a risky game of creative balance sheets and speculative valuations? Zsolt Janos His current analysis critically examines the mechanisms that could be behind the seemingly exploding profits.

Speculative waves in the capital market: From Bitcoin to AI

The financial markets in Austria and Germany are no strangers to speculative waves. Memories of the dot-com bubble, but also more recent phenomena such as the developments surrounding... Bitcoin and the strategy of Michael saylor (MicroStrategy) demonstrates how quickly euphoria can turn into disillusionment. Saylor's mantra-like "never, never, never sell your Bitcoin" now seems to be gaining traction, as sales have become necessary. Such developments serve as a reminder that even seemingly safe bets carry risks.

The “AI profit bubble”: A critical look at tech stocks

One analyst recently spoke not of an AI vision bubble, but of a “AI profit bubble”This means that companies are reporting such sharply rising profits that share prices can barely keep up. But how can profits explode so suddenly and massively without any foreseeable effect? ​​The answer could lie in certain accounting mechanisms that artificially accelerate these profits.

Creative balance sheets as the foundation of the boom: An accounting rule in focus

Many past bubbles originated in creative balance sheets and accounting practices. In the current AI boom, a relaxation of an accounting rule, introduced back in 2016, plays a central role. This rule change allows companies to unrealized gains from investments to report in their balance sheets if the value of these investments increases. This means that if the valuation of an investment rises, the companies involved can book this as their own profit, even if no actual sale has taken place.

• For example: An investment increases in value. The company holding the investment records this increase in value as profit.
• The downside: For many unlisted investments, the valuation is often one-sidedly positive, as it is based on future expectations and regular fundraising events that continually drive valuations upwards. The initial public offering (IPO) is crucial to fixing this valuation.

The interplay of tech giants: A complex network of investments

company like Alphabet (Google), Amazon and ecosystem have invested heavily in AI pioneers such as Anthropic and OpenAI They invest. These investments are regularly revalued, allowing investors to report ongoing profits. But it gets even more complex:

• A: Nearly 50 percent The reported record profits are said to have originated from the Antropic investment.
• Amazon: Of 16 billion dollars Record profits are coming 50 percent from pre-IPO investments and their rising valuations.
• Microsoft and OpenAI: Microsoft invested in OpenAI and simultaneously received orders from OpenAI for computing resources. This resulted in an influx of orders for Microsoft and an increase in the value of its stake. OpenAI, in turn, ordered computing resources, justifying further investments in expanding Microsoft's capacity.

Another critical point is the so-called "Sales backlog"These are sales that have already been booked but cannot yet be delivered. They are based on future letters of intent and orders that are included in the balance sheet. This practice massively inflates balance sheets and profits.

• ecosystem reported 627 billion dollars Sales backlog, of which almost 300 billion from OpenAI and 30 billion by Antropic.
• The sales backlog is causing problems for Microsoft 49 percentWherein Google 43 percentWherein Amazon 50 percent and active in Oracle 54 percent of the reported sales.

These figures show how much the reported profits of Tech giants depend on future, not yet realized services and how investments create the basis for further investments and recorded sales.

Signs of overheating in the capital market?

The market is becoming increasingly sensitive to even the slightest deviations from expectations. As BroadcomWhen one of the stars of the AI ​​world released its figures, the company missed analysts' expectations by only a tiny percentage. The share price immediately fell. This shows that the stock market has already priced in extremely high future expectations. Should other companies miss expectations or even issue profit warnings, sentiment could quickly turn.

The need for Initial Public Offerings (IPOs) The AI ​​companies involved are crucial in order to fix pre-IPO valuations and realize profits. SpaceX For example, is about to go public with a valuation of 85 billion dollars, while Google a capital increase of 150 billion dollars plans (after deducting Berkshire's $10 billion). These developments require massive liquidity in the market and could be interpreted either as a sign of profit-taking or a reallocation of capital.

Conclusion: Vigilance is required when investing in AI.

The current AI boom is impressive, but the analysis of Zsolt Janos This suggests that a significant portion of the reported profits is based on accounting mechanisms and highly speculative pre-market valuations. The dependence of the US economy on the AI ​​boom, as emphasized by the former Trump administration, underscores the political and economic significance of this development.

Investors in Austria and Germany should understand these complex interrelationships and maintain a critical perspective. History teaches us that even the most promising hype cycles can end in a bubble if the fundamentals no longer support expectations. A sound investment strategy is more important than ever.

Professional wealth management in uncertain times

In a dynamic and potentially overheated financial environment, sound and independent wealth management advice is essential. Zsolt Janos We help you develop the right investment strategies and navigate your assets safely through all market phases. Avoid speculative traps and build on a solid foundation.

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