Warren Pies of 3Fourteen Research joins Excess Returns to break down the AI bull market, the macro risks investors should watch, and why the data still supports continued strength in semiconductors and equities. We discuss GPU demand, token usage, open source AI, Fed policy, housing weakness, oil, earnings growth, market valuations and the biggest risks to the current cycle. Warren Pies on X https://x.com/WarrenPies 3Fourteen Research https://www.3fourteenresearch.com/ Caliban https://www.3fourteenresearch.com/caliban Main topics covered Which bearish AI arguments actually matter for investors Why regulatory risk may be the biggest long-term AI concern How data center spending is crowding out housing investment Why the Fed may struggle to cool AI-driven investment without hurting the labor market What GPU availability says about real-time AI compute demand Why open source AI is not yet replacing frontier models How token pricing and OpenRouter data help measure AI usage Why semiconductor stocks may still be in the middle of a major cycle How semis are being valued differently than traditional cyclicals Why Fed policy, earnings growth and market multiples are key to the second half of 2026 What oil positioning and refined product inventories say about macro risk Why 3Fourteen remains constructive on equities despite rising overheating risk Timestamps 00:00 Intro 01:04 Which bearish AI arguments have teeth? 04:00 Why AI regulation is the biggest long-term risk 07:03 Technology spending versus housing investment 11:03 How AI CapEx is showing up in inflation data 13:04 Why the labor market is more fragile than headline jobs data suggests 16:24 Why GPU availability is a cleaner signal than CapEx announcements 21:00 What token pricing and OpenRouter data reveal about AI demand 27:36 How 3Fourteen benchmarks frontier models against open source AI 30:00 Why the semiconductor selloff looked like a buyable dip 34:02 Are semiconductors still cyclical businesses? 38:08 Why Fed tightening could be the thing that ends the bull market 42:15 What the oil shock means now 45:47 Refined product inventories, crack spreads and energy stocks 47:18 Are earnings estimates becoming too optimistic? 50:49 Why the debasement regime still supports equities 54:05 Where to find Warren Pies and 3Fourteen Research

The AI Trade, the Fed and the Next Phase of the Bull Market | Warren Pies

Excess Returns 

# Full Transcript

**Podcast:** Excess Returns

## Participants

- **Matt** (None)
- **Warren Pies** (3Fourteen Research)

## Transcript

Sehr gut, sehr gut, sehr gut! Sehr gut? Wieso Steuer ist sehr gut? Das sagen ganz viele! Wer sagt das? Stiftung Warentest, Computer Build, Focus Money, Chip, Finanztipp, such dir was aus! Mega! Aber das ist doch bestimmt kompliziert! Nö! Einfach Foto von der Lohnsteuerbescheinigung machen und fertig! Klingt sehr gut! Ist sehr gut! Mit Wieso Steuer? Bis zum 31. Juli abgeben!

You're watching Excess Returns, the channel that makes complex investing ideas simple enough to actually use, where better questions lead to better decisions. Most people talk about markets and think, it's all war and peace. But I, my dear Excess Returns watchers, know when you talk macro, it's really all war and pies. How you doing, Warren? What's good? Welcome to the show. I'm good. I appreciate that intro. Thank you, Matt. The Leo Tolstoy of Twitter threads and LinkedIn posts with some of this stuff. You're killing me with the content. It's great.

I'll take it. What is it, um, every, uh, every bear market is, is a, is an allegory or whatever? I don't know. Yeah, you got it. You got it. You got it. Right up there with the family quotes. See, you're, you're well-versed. I know you're well-read. Speaking of well-read, though, I'm starting with Fernando. Fernando is not here with us, but is in spirit always. He said that being invested in the market right now means constantly fighting against a deluge of bearish arguments about AI.

AI kind of feels like everything because when you sort through it, which of the bearish AI arguments do you think actually have any teeth? Yeah. I mean, I think that's when you zoom way out, that's kind of markets in general, right? It's just, you're always assessing risks and that's how we're wired and anything that's new or novel is going to be especially fertile ground for concerns to, to crop up and, uh, for bear market.

Stories and risks to, to crop up. And so our job is whatever it is, AI, whatever is to, as researchers is to test the theories as they come and try to be objective and level-headed about it. And so that's what we do often with AI. I'm fortunate to work with Fernando. Like you said, he has a background in machine learning. And so this is not something that's like he had to pick up on the fly. It's an area of the world he's been involved in for over a decade.

And so it's, it is massively fortuitous for me because I'm just like a dumb macro guy with a background and energy. And so I'm just trying to pick this up on the fly. And I can understand why there's so many generalists who are skeptical and worried about this, this build out. And has it's turned them off and it's made them just nervous and probably caused a lot of frustration because in order to, I mean, tech is now what?

50% of the market in order to outperform if tech's outperforming and you already feel like tech's a big overweight...

The AI Trade, the Fed and the Next Phase of the Bull Market | Warren Pies

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The AI Trade, the Fed and the Next Phase of the Bull Market | Warren Pies

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.