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Some software stocks find upside in AI

There was a time when software companies could rely on growth rates and compelling narratives about scalable business models. Revenue was paramount, profit an afterthought. A decade ago, investors routinely paid six to ten times annual recurring revenue for SaaS businesses, and that felt entirely reasonable. Anyone who raised concerns about cash flow was dismissed as an old-fashioned investor who did not understand the future. That era has ended.

Markets are pricing a world that may no longer exist

Markets are pricing a world that may no longer exist. Democratic institutions, designed for slower cycles and contained economies, are struggling to govern the complexity they now face. That failure, argues economist Jeannette von Wolfersdorff, is already shaping the conditions under which capital is allocated and regulated.

AI’s next winners probably won’t be tech-companies, says Vanguard’s head of research

If history is any guide, the artificial intelligence boom will not be those who build the technology, but those who deploy it. That is the view of Kevin Khang, head of global economic research at Vanguard. He argues that today’s market narrative risks mistaking the early winners for the ultimate ones.

Chart of the week: J-curve or U-turn

For over ten years, I’ve been writing articles for investors, economists, and anyone with even the slightest interest in the financial markets. Extremely negative stories, stories about the issues of the day, or stories with sensational headlines tend to do particularly well. Although I’m occasionally lumped into the first category, I’m usually not very good at writing those kinds of stories. But today I have a topic that tops the charts every day: Artificial Intelligence.

Galactic American IPOs set to test passive investors as index rules shift

A wave of massive initial public offerings, including SpaceX, Anthropic and OpenAI, is set to hit US equity markets just as index providers move to fast-track their inclusion. Asset managers expect this combination could inject fresh volatility into passive investment strategies.